A new bill, AB 2364, was recently proposed by California lawmakers, which will detrimentally deter property owners from the rental property business if passed. AB 2364 would have an inevitable chilling effect on housing supply – In the midst of California’s current housing crisis – all because it significantly erodes the Ellis Act.
The Ellis Act was a bipartisan act, sponsored by the California Association REALTORS®, which was passed in 1985. The Act made it permissible for rental property owners to go out of business, like any other business is allowed. Prior to the Ellis Act rental owners were forced to stay in business, even when it caused severe financial strife. Consequently owning rental property was much riskier than it should have been before the Ellis Act. AB 2364 threatens to revert California back to this state of excessive and unfair risk for rental owners.
Find out how to help prevent AB 2364 from passing and more info here.