California proposes new relocation assistance and rent waiver regulations for tenants

On February 6, 2025, California Assembly Bill 474 was introduced in the California Legislature, aiming to enhance tenant protections during the eviction process. The bill seeks to address the growing concerns surrounding housing stability and tenant rights amid rising rental costs and housing shortages.

The primary provisions of AB 474 include mandatory relocation assistance or rent waivers for tenants whose leases are terminated. Specifically, landlords must provide assistance equivalent to one month’s rent when issuing a notice to terminate tenancy. This assistance must be delivered within 15 days of the notice, and failure to comply renders the termination notice void. Additionally, if tenants do not vacate after the notice period, landlords can recover the relocation assistance as damages in eviction proceedings.

Notably, the bill outlines specific exemptions, including transient hotel occupancies, certain nonprofit housing, and single-family owner-occupied residences, among others. These exclusions aim to balance tenant protections with the rights of property owners, particularly in smaller residential settings.

The introduction of AB 474 has sparked debates among lawmakers and stakeholders. Proponents argue that the bill is essential for protecting vulnerable tenants from sudden displacement, especially in a state grappling with a housing crisis. Critics, however, express concerns about the potential financial burden on landlords, particularly small property owners, who may struggle to absorb the costs associated with mandatory assistance.

Economically, the bill could have significant implications for California's rental market. Supporters believe that by providing tenants with financial support during transitions, the bill may reduce homelessness and stabilize communities. Conversely, opponents warn that increased regulations could deter investment in rental properties, potentially exacerbating the housing shortage.

As AB 474 progresses through the legislative process, its future remains uncertain. Experts suggest that amendments may be necessary to address the concerns raised by property owners while still providing meaningful protections for tenants. The outcome of this bill could set a precedent for similar legislation across the nation, reflecting the ongoing struggle to balance tenant rights with property owner interests in an increasingly challenging housing landscape.