On Thursday, April 24, 2025, the Assembly Committee on Housing and Community Development will hold a hearing that could reshape the landscape of rental housing in California. The focus: Assembly Bill 1157 (AB 1157), introduced by Assembly member Ash Kalra.
This new proposal seeks to dramatically expand and permanently entrench rent control across the state, raising concerns among property owners, investors, and real estate professionals alike.
Here’s what you need to know:
Key Provisions of AB 1157
1. Stricter Rent Cap
Current Law (AB 1482): Landlords can raise rent 5% + CPI, up to a maximum of 10% annually.
Proposed Change (AB 1157): Rent increases would be limited to 2% + CPI, capped at 5% total, whichever is lower.
Example: If CPI is 3%, the new max increase allowed would be 5%, not 8%.
2. Elimination of Exemptions for Single-Family Homes & Condos
Under AB 1482, single-family homes and condos are exempt from rent caps if not owned by corporate entities.
AB 1157 would remove that exemption, making nearly all non-owner-occupied rental units in the state subject to rent control and just cause eviction rules, regardless of property type.
3. Permanent Rent Control
AB 1482 included a “sunset clause”, set to expire in 2030.
AB 1157 would repeal the sunset provision, making rent control and just cause eviction laws permanent across California.
What Does This Means for Landlords & Investors
Decreased Rental Flexibility: Lower allowable rent increases reduce the ability to keep pace with inflation, rising taxes, insurance, and maintenance costs.
More Regulatory Compliance: Owners of single-family rentals and condos would now need to navigate rent caps, relocation assistance, and just cause notices.
Long-Term Impact on Property Values: With fewer financial levers to drive returns, this could potentially cool investment appetite, especially in rent-controlled markets like Los Angeles and San Francisco—and increasingly, San Diego.
Does AB 1157 Affect Vacancy Decontrol or Substantial Remodel?
As of now, Assembly Bill 1157 (AB 1157) does not propose changes to vacancy decontrol or the substantial rehabilitation exemption under California’s rent control laws. The bill focuses on:
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Reducing the annual rent increase cap: From the current 5% plus the Consumer Price Index (CPI), capped at 10%, to 2% plus CPI, capped at 5%.
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Eliminating exemptions: Removing the exemption for single-family homes and condominiums, thereby extending rent control and just cause eviction protections to these properties.
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Making rent control permanent: Repealing the “sunset” provision of AB 1482, which was set to expire in 2030, thus making the rent control measures permanent.
The existing provisions under AB 1482 regarding vacancy decontrol and substantial rehabilitation remain unchanged in AB 1157.
ACI’s Perspective
At ACI Apartments, we’ve worked with countless investors navigating California’s evolving legislative landscape. If passed, AB 1157 would mark one of the most sweeping changes to rent control since AB 1482.
Our team will be closely watching the April 24 hearing and providing updates as the bill progresses. If you own multifamily property in California—or are considering an investment—now is the time to review your strategy and understand how these proposed changes may affect your assets.
For more information on the proposed changes you can click HERE
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The information in this blog is for general informational purposes only and should not be your sole basis for financial or investment decisions. While ACI Apartments uses reliable sources for data and analysis, you should verify all information independently. This blog is not a comprehensive report on all changes to local, state, or federal laws affecting property owners and managers. Laws may have changed or been misinterpreted since publication. Always consult legal counsel or a licensed CPA before making decisions. ACI Apartments is not liable for actions taken based on this content.
