UC Davis Law Professor Questions AB 1482's Long-Term Reliability for California Housing Investors

Chris Elmendorf, a prominent Professor of Law at UC Davis and an authority on California land-use and housing law, has publicly questioned whether housing investors can reliably depend on the "AB 1482 compromise" in California. In a recent social media post, Elmendorf stated, "To persuade developers of that, either a lot of orgs have to change their positions & start sending costly signals of the change, or else CA needs to provide contractual guarantees." He directly posed the "honest question: Do you want housing investors to rely on the AB 1482 compromise, or not?"

California's Assembly Bill 1482, known as the Tenant Protection Act of 2019, established statewide rent caps and "just cause" eviction requirements. The law limits annual rent increases to 5% plus the local Consumer Price Index, with a maximum cap of 10%. It also mandates that landlords have a valid reason to evict tenants who have resided in a unit for at least 12 months.

The legislation included exemptions for newly constructed buildings (less than 15 years old) and certain single-family homes not owned by corporate entities. These exemptions were intended to encourage new housing development and mitigate concerns that rent control would stifle construction. This balance between tenant protection and developer incentives forms the "compromise" Elmendorf references.

However, Elmendorf's commentary highlights a potential gap in investor confidence, suggesting that the current regulatory environment may lack the predictability needed for significant, long-term housing investment. His call for "costly signals" or "contractual guarantees" indicates a need for more robust assurances from policymakers to de-risk development in the state. This perspective aligns with broader discussions among housing advocates and economists about rent control's impact on housing supply.

Experts, including Elmendorf, often point to the potential for rent control to disincentivize new construction if investors perceive insufficient returns or excessive regulatory burdens. While AB 1482 aims to stabilize housing costs for tenants, its long-term effect on attracting the necessary capital to address California's chronic housing shortage remains a subject of debate. The law is currently set to sunset in 2030, adding another layer of uncertainty for future planning.