In California, landlords have the legal right to demand tenants to pay security deposits exceeding $10,000 before granting access to rental apartments. Under state law, property owners can charge up to two or three months’ rent as a security deposit, depending on whether the unit is furnished or not. However, a new bill, Assembly Bill 12, is currently under consideration by the Senate to limit security deposits to a single month’s rent for most apartments, condos, and single-family homes. This move seeks to ease the burden on California’s 17 million renters, who are struggling to cope with the state’s skyrocketing rental prices, which range from roughly $1,750 to $2,500 for a two-bedroom apartment in the Bay Area. Approximately half of all renters pay more than 30% of their income on housing costs, according to academic researchers with the Bay Area Equity Atlas.
Assemblyman Matt Haney, the Democratic sponsor of the bill and member of the Legislature’s renters caucus, argues that the current high cost of security deposits leads to either families taking on debt or occupying insufficient, crowded, or unsafe housing. Republican assembly members, who are a small minority in the chamber, voted against the bill, arguing that it would worsen the state’s chronic housing shortage, leading landlords to exit the rental market. However, supporters insist that one-month security deposits should be enough to cover damages in most cases. They also note that a dozen states across the political spectrum already have similar laws.
While landlords have expressed concerns that such a measure could expose them to financial risks, Haney notes that property owners can still recover costs in court. However, a possible exemption for small landlords renting single-family homes is being considered. Haney believes that although building more affordable housing is essential, limiting security deposits is a much-needed, feasible measure to alleviate housing costs for Californians.
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