One policy, an "anti-gouging cap," is inspired by existing California law that allows localities to limit rent increases to no more than 10 percent during a declared disaster or state of emergency. The proposed policy would be statewide, enacted to provide stability and predictably regardless of a disaster declaration. The cap would be based on the annual regional or state consumer price index plus 5 percent but not to exceed 10 percent; the cap would equal the price index in years when the index exceeds 10 percent. The cap would apply to all rental units regardless of the tenant's income. However, the cap would not apply when tenants in a unit change (the new tenant could be charged rent greater than the capped rent of the former tenant).
The other policy would create a property tax waiver for multifamily rental developments that voluntarily include units with rents that are below the market rate. The authors suggest that the statewide baseline should be at least 10 percent of the units affordable to households earning no more than 120 percent of the area median income. Within these limits, the policy would give cities flexibility to establish rates of set-asides and affordability levels that best accommodate their housing conditions. The tax abatement, which would apply to the increase in property value, and income restriction should last for 15 years.