California housing bond advances as rent control bill fails committee vote

California’s Senate Housing Committee approved a $10 billion affordable housing bond by an 8-1 vote last week, while a separate proposal to cap annual rent increases died in the Assembly Judiciary Committee on Tuesday after receiving only four of the seven votes needed to advance, marking a split start to a legislative session housing advocates have called critical.

The contrasting outcomes illustrate the fault lines inside California’s Democratic majority on housing: a broad coalition backs building more homes, but efforts to deliver immediate relief to renters already struggling with costs have repeatedly stalled amid opposition from landlord groups and skeptical members of the governor’s own party.

$10 billion bond moves toward June ballot

Senate Bill 417, authored by Sen. Chris Cabaldon, a Napa Democrat, cleared the Senate Housing Committee and heads to the Senate Appropriations Committee next week. Lawmakers are seeking to place the measure on the June primary ballot, which would require Gov. Gavin Newsom to sign it into law by Jan. 22.

“Those homes don’t build themselves, and it’s time to finish the job,” Cabaldon said during a committee hearing last week. “To unlock the full promise of these reforms requires cash. It requires sufficient capital, as it always has, to move these affordable housing projects from approval and permitting to construct.”

The bond measure would allocate $7 billion to the state’s Multifamily Housing Program, which issues low-interest loans to build and maintain permanent and transitional rental housing for lower-income households. Another $2 billion would fund wildfire prevention, rental assistance, and affordable housing for low-income tenants and farmworkers. The remaining $1 billion would provide low-income first-time homebuyer assistance, including down payment help.

The committee also approved a separate bond proposal to fund housing for homeless youths. Lawmakers are looking to combine the two measures. Sen. Caroline Menjivar, a Van Nuys Democrat who authored that proposal, said she had been unhoused for a year and a half at age 19, couch-surfing at 19. “This is an investment that is really going to help us save money down the line,” she said.

The bond push comes as the 30-year fixed mortgage rate stands at 6.16%, keeping homeownership out of reach for many California residents and sustaining pressure on the rental market.

Rent control bill falls short

Assembly Bill 1157, introduced by Democratic Assemblymember Ash Kalra of San Jose — who also chairs the Assembly Judiciary Committee — would have capped annual rent increases for most rental homes at 5% and tied the rate to the Consumer Price Index, which has risen 2.65% over the past year. Under current state law, landlords may raise rent by up to 10% annually.

Kalra narrowed the bill hours before the vote to exclude single-family home tenants, a concession intended to broaden support. It was not enough. All three Republican committee members voted against the measure. Five Democrats — Assemblymembers Rick Zbur of Los Angeles, Blanca Pacheco of Downey, Diane Papan of San Mateo, Catherine Stefani of San Francisco, and Rebecca Bauer-Kahan of San Ramon — did not cast votes, which under committee rules counted as no votes.

Zbur and Bauer-Kahan said during the hearing that rent hikes stem from the state’s housing shortage and that the Legislature should focus on building more supply. Stefani’s office said in a statement that a lower rent cap would risk squeezing landlords who already face rising costs.

“Tenants need a permanent solution, not a temporary fix,” Kalra said. “If we don’t act with urgency to help our tenants in crisis, we are going to continue to contribute to the risk of homelessness.”

Lidya Morales, a 53-year-old single mother from San Diego, said her monthly rent rose from $1,300 in 2022 to $2,000 last year, forcing her to work three hotel jobs to keep pace. “I don’t want to live in my car with my kids,” she said.

After the vote, hundreds of tenants affiliated with the Alliance of Californians for Community Empowerment protested in the hallway, chanting “Housing is a human right.” The proposal had failed to advance in the prior session as well, stalled by a coalition of landlords and realtors led by the California Apartments Association. Voters rejected related ballot measures in 2018 and again in 2024.

SB 79 fallout: mobile home parks, zoning confusion

Alongside the new session’s proposals, lawmakers are also contending with unintended consequences from legislation passed last year. Senate Bill 79, authored by Sen. Scott Wiener of San Francisco, overrides local zoning to allow apartment buildings of up to seven stories near major transit stations in metro areas. The measure passed narrowly last year after 13 rounds of amendments.

Mobile home park residents in the Bay Area say the law exposes their communities to displacement. Gail Rubino, a resident at the El Dorado Mobile Home Park in Sunnyvale, told lawmakers last week that at least 36 parks in six of the state’s most populous counties fall within the law’s reach. She estimated that if all were redeveloped, more than 5,400 people would be displaced.

“This lack of protection threatens existing affordable housing stock that SB 79 seeks to increase,” Rubino said.

Wiener acknowledged the loophole. A new bill from Sen. Aisha Wahab, whose Fremont district includes many of the affected parks, would shield mobile home parks from redevelopment under the law.

SB 79 has also created confusion among local officials over which counties it applies to. Wiener has said he intends the law to cover eight of the state’s most urban counties; local government associations contend only four qualify. Some agencies have paused adopting new zoning maps, fearing litigation without clearer guidance.

Committee leadership change in February

In February, Sen. Jesse Arreguín of Oakland will take the helm of the Senate Housing Committee, replacing Wahab. Newsom used his State of the State address last week to call on lawmakers to reduce construction costs, adopt new building methods, and pass “worker-centered reforms” — marking his last year in office as a continued opportunity for housing production legislation.