A regional transportation agency this week will consider conditioning $45 million in transit funding on whether cities and counties adopt rent control and other rental housing regulations that go beyond state law.

The Metropolitan Transportation Commission is expected to vote Wednesday, Feb. 25, on whether to allocate the funds to a program known as Transit-Oriented Communities. Under the proposal, local governments seeking transportation grants would be encouraged to adopt or expand rent control, just-cause eviction rules and tenant-relocation payment requirements, and materials before the commission indicate jurisdictions could receive incentives for lowering rent caps and restricting tenancy terminations, including owner move-in and substantial-renovation cases.

California law already establishes statewide limits on rent increases and eviction rules under AB 1482, the Tenant Protection Act of 2019. According to a Jan. 27 coalition letter signed by the California Apartment Association and other business groups, the commission’s Transit-Oriented Communities framework would push cities to adopt rent caps, eviction restrictions and inclusionary zoning requirements beyond those statewide standards to compete for transportation funding.

The proposal also contemplates new revenue sources to support the program, including potential tax increases.

Rental housing providers in the nine-county Bay Area could be affected if cities and counties revise local laws to align with the program’s criteria.

CAA urges commission to reject proposal

The California Apartment Association, which has engaged on the issue since May 2025, is urging commissioners to vote no.

In the Jan. 27 coalition letter, the association and other business groups said rent control, just-cause and relocation payment mandates should not be used as conditions for cities and counties to qualify for transportation funds and that the policy should be aligned with existing state law.

In an Oct. 14 coalition letter, the coalition also warned that conditioning One Bay Area Grant funding on compliance with the Transit-Oriented Communities framework could deter housing development and create regulatory conflicts with state law and certified Housing Elements.