Nationwide, Riverside was named number one on a list for highest rent increase over the last year.
According to a report published in April, Riverside landed on two separate lists for highest rent increases for both one and two-bedroom apartments. A list of 10 cities’ rent increases for two-bedroom units named Riverside as the number one city, with the biggest jump at 56 percent year-over-year. For one-bedroom units, rent prices in the city climbed 24.9 percent year-over-year, making Riverside number four on another list of 10.
Glynnis Bridges-Williams, a certified U.S. Department of Housing and Urban Development (HUD) counselor with the Fair Housing Council of Riverside County, said there may be multiple reasons for the hike in rent cost.
Under recent state law, owners cannot increase the gross rental rate for a property over a 12-month period by more than five percent plus the Consumer Price Index (CPI) or by 10 percent, whichever is lower. However, there are exceptions.
“It is very important to keep in mind that the city of Riverside has a number of single-family homes and owner-occupied units that are exempt from following the new law,” Bridges-Williams said.
There are four exceptions to the new law.
- Properties built within the last 15 years are exempt as a way to incentivize developing more rental housing units.
- A single-family home, unless owned by a real estate investment trust, a corporation or an LLC in which at least one member is a corporation.
- Duplexes where the owner occupies one of the units.
- Cities with existing rent control laws that are more stringent.
“Property owners that fall into either one of those categories are allowed to increase the rates which has a direct impact on the percentage of rent increases across the city,” Bridges-Williams said.
The increases put tangible pressure on those already struggling to make payments, especially on low-income families that are more likely to rent.
An American Housing survey reveals that rental burdens affect low and very low-income families disproportionately to their higher-income neighbors. Low-income families may pay up to 40 percent of their income on shelter, while very low-income individuals pay more than half their income on rent, according to a Worst Case Housing Needs survey.
On January 29, Governor Gavin Newsom signed legislation to extend the state’s eviction moratorium through June 30 of this year, protecting those whose income was impacted by the COVID-19 pandemic.
According to Rose Mayes, Executive Director for the Fair Housing Council, it may only hold back the inevitable. “We are bracing ourselves for the waterfall of evictions that will take place after the moratorium is lifted,” she said.
Bridges-Williams said she directs property owners and tenants to an online calculator that determines rent increases according to zip code. Users can use it to identify the maximum rent increase that is allowed.