A bill that advanced from the California Legislature this week aims to mandate that some California landlords “unbundle” parking costs from rental rates.

Introduced by Assemblywoman Wendy Carrillo, D-Los Angeles, AB 1317 would apply to new residential properties with 16 or more units that receive a certificate of occupancy on or after Jan. 1, 2025. Serving as a pilot project, the bill will apply only in the counties of Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, and Ventura.

The legislation stipulates that fees for any parking spaces must be charged separately from rent and this arrangement must be maintained for the life of the rental property.  The bill does not regulate the price that the owner can charge for the parking space.  Such unbundled parking would be subject to its own rental agreement or an addendum to the tenant’s existing residential lease. AB 1317 specifies that a tenant’s failure to pay the parking fee cannot serve as the basis for an unlawful detainer action; however, the owner can prohibit the tenant from continued use of the space if they fail to pay.

The bill exempts properties or units with individual garages, deed-restricted low-income properties, and properties financed with low-income housing tax credits or specified tax-exempt bonds.

The bill’s author argues that bundling parking costs with rent encourages car ownership, contributing to traffic congestion and environmental issues. The governor has until Oct. 14, 2023, to sign or veto legislation.

CAA will provide lease forms and guidance for owners should it become law. Watch for updates.