The San Diego City Council and San Diego County Board of Supervisors are reviewing a joint ordinance intended to protect renters from “junk fees” that drive up the cost of housing. The Residential Rental Price Gouging, Fee Exploitation, and Cost Transparency Ordinance is a joint city-county effort that would cap rental fees beyond monthly rent, ban certain add-on charges and “require landlords to clearly disclose the true cost of renting.” The proposal is being introduced at the San Diego City Council’s Select Committee on Addressing Cost of Living and at the County Board of Supervisors meeting in early November.
The ordinance is targeting so-called “junk fees,” including charges for pet rent, screening fees, and maintenance surcharges. Under the proposal, housing providers would be unable to charge for many common services and cap charges on others at just 5% of the monthly rent.
Key Provisions
Rent Increases: The ordinance limits how much landlords can increase rent annually, especially during declared states of emergency or abnormal market conditions.
Application and Late Fees: The ordinance specifically addresses common rental fees. Application fees must reflect the actual cost of screening tenants, such as background and credit checks. Excessive markups are prohibited, and all fees must be clearly disclosed before the application process begins. Late fees are capped to prevent punitive charges. Landlords must set reasonable late fee limits and provide clear deadlines and grace periods.
Amenity Fees: Charges for amenities—such as pools, gyms, laundry rooms, or parking—must be reasonable, clearly itemized, and disclosed in advance. Hidden amenity fees are not allowed, and tenants must be informed of all costs associated with the use of communal facilities.
Pet Fees: Pet fees, deposits, or monthly charges must be fair and not excessive. Landlords must disclose all pet-related costs upfront, and these fees cannot be used as a means to circumvent rent caps or other regulations.
Cost Transparency Requirements: Landlords are required to provide a clear, itemized breakdown of all costs, fees, and charges associated with renting, including one-time and recurring expenses, prior to lease signing. This covers rent, utilities, deposits, and the aforementioned fees.
Disclosure and Documentation: Rental agreements must include detailed documentation of all charges and explanations for any fees besides standard rent and security deposits.
Tenant Protections: Tenants are empowered to challenge unlawful rent increases or exploitative charges, including unreasonable application, late, amenity, or pet fees, through city resources. Violations by landlords may result in penalties or enforcement actions.
Impacts
Administrative Burden: Increased paperwork and compliance requirements, especially for small property owners.
Loss of Revenue: Potential loss of revenue from previously allowable service fees.
Potential Impact on Supply: Some landlords may exit the rental market due to regulatory limitations, affecting housing availability.
Unintended Costs: Stricter rules may lead to higher base rents or reduced amenities as landlords seek to offset costs.
Unintended Outcomes: Stricter rules may result in landlords offering less amenities.
Enforcement Challenges: Consistent implementation and monitoring require resources and may be difficult to sustain.
Contact Us for Help
Navigating changes in the ever-changing legal environment is not easy. Cal-Prop expertly manages these time-consuming tasks, so you don’t have to. Call us to discuss how we can help save you time and money.
Please contact us at Cal-Prop Management. We work with investors in San Diego and the surrounding areas.
Additional Resources
Josh Browar’s perspective regarding this ordinance is linked below. https://mailchi.mp/thebrowargroup.com/k7u53dz4hr-17461845?e=a682bc942a
