A statewide proposal that would sharply tighten California’s existing rent cap law is again in play as the Legislature enters the second year of the session.

The measure, AB 1157 by Assembly member Ash Kalra, D-San Jose, stalled last year after advancing out of the Assembly Housing and Community Development Committee but failing to move forward in the Assembly Judiciary Committee, where Kalra serves as chair. The bill would make sweeping changes to California’s current statewide rent cap and just-cause eviction law, the California Tenant Protection Act enacted through AB 1482 in 2019, including lower allowable rent increases, expanded coverage and the removal of the law’s scheduled sunset.

As drafted, AB 1157 would reduce the statewide cap on annual residential rent increases to 2% plus inflation, capped at 5%, compared with the current limit of 5% plus inflation, capped at 10%. The proposal would also extend rent caps and just-cause eviction requirements to single-family homes, condominiums, accessory dwelling units and individually owned townhomes that are currently exempt under state law, and eliminate AB 1482’s Jan. 1, 2030, sunset date.

The California Apartment Association opposed the proposal during last year’s legislative session and has raised concerns that the bill’s provisions would discourage investment in rental housing, place added pressure on small property owners and worsen California’s ongoing housing shortage.

During last year’s debate, CAA pointed to research from the California Legislative Analyst’s Office and academic institutions showing that strict rent control policies reduce housing availability and discourage new construction. Association representatives also cited data showing a slowdown in multifamily housing permits following the qualification of a failed 2024 statewide ballot measure that sought to expand rent control.

Opposition to the bill is not limited to rental housing providers. Besides CAA, other pro-housing organizations have  warned that extending rent control to accessory dwelling units — one of the few housing types that has continued to see growth in recent years — could further constrain housing production.

CAA and other opponents have also pointed to the outcomes of recent statewide ballot measures related to rent control. Voters rejected Proposition 10 in 2018, Proposition 21 in 2020 and Proposition 33 in 2024, each by margins exceeding 20 percentage points.

“AB 1157 disregards this clear mandate and ignores the electorate’s voice,” says a letter from CAA to Kalra.

Rental housing providers have raised additional concerns about the impact the proposal would have on small owners, many of whom are still recovering financially from the inability to collect rent during the COVID-19 pandemic. Opponents argue that removing long-standing exemptions for single-family homes and eliminating the sunset date for rent caps would place added strain on these owners while doing little to address the state’s long-term housing challenges.