Expiration of State of Emergency in Sonoma County on December 31, 2021, Could Mean Steep Rent Increases in 2022

A state of emergency has been in effect in Sonoma County continuously since October 9, 2017, when wildfire destroyed thousands of homes in Santa Rosa, but the most recent extension of the state of emergency will expire on December 31, 2021.

Penal Code § 396 limits rent increases during a state of emergency to a total of 10% of what the rent was when the state of emergency was declared in October 2017. What will happen to rent in Sonoma County when the state of emergency expires?

  • Rent for single family residences can be raised by any percentage with 60 days notice.
  • Rent for low income housing under the federal Low Income Tax Credit Program, could be raised by 14.4%.

Civil Code § 1947.12 limits how much a landlord can raise the rent for most building to 5% plus the percentage change in the cost of living, or 10 percent, whichever is lower. However Civil Code § 1947.12 does not apply to single family residences or to low income housing.

Therefore, landlords of a single family residence can raise their tenants’ rent by any amount as long as they give 90 day’s notice of the increase. See Civil Code § 827(b)(3).

A second category of buildings not protected by Civil Code § 1947.12, are buildings receiving Low Income Housing Tax Credits (LIHTC) through the California Tax Credit Allocation Committee. Rent in these buildings is determined by a percentage, usually, 30% to 60% of the Area Median Income (AMI) as calculated for the county where the building is located. This means that residents of LIHTC properties in counties with high median incomes pay more rent than residents in buildings located in counties with low median incomes. For example, at 2021 levels, a one bedroom apartment at 60% of AMI is $1,309 in Sonoma County, $2,055 in San Francisco County and only $803 in Stanislaus County.

The AMI is calculated yearly, and if there has been an increase in median income in a county, the rent for LIHTC properties there goes up the same percentage. In Sonoma County LIHTC rent has gone up an average of 5.9% each year since 2018. The cumulative increase since 2018 has been 18.5%.

Year 60% AMI
1 BD 
Annual
Increase
Cumulative
Increase
2021 $          1,3092.4%18.5%
2020 $          1,2785.2%15.7%
2019 $          1,21510.0%10.0%
2018 $          1,105
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Increase in LIHTC Rent in Sonoma County 2018-2021

Due to the ongoing state of emergency in Sonoma County, the cumulative increase has been capped at 10% total. This means that as of 2021, there is an 8.5% increase in AMI, that LIHTC landlords have not been able to pass on to low income tenants.

In 2022, with the state of emergency expired, LIHTC landlords will be able to increase their tenants’ rent by the 2022 increase in AMI, plus the unclaimed 8.5% increase from prior years. If the 2022 increase is similar to the average past increases of 5.9%, then low income residents will be facing a 14.4% rent increase (8.5% plus 5.9%) rent increase next year.

Low income seniors subsisting only on social security, will find it difficult or impossible to pay this rent increase. Social Security increases by the Cost-of-Living Adjustment (COLA). The Social Security Administration has announced a 5.9 % increase in social security benefits for 2022, however it remains to be seen if the COLA increases, which determine retirees’ income, will keep pace with the increase in AMI, which determines affected retirees’ rent. Over the last four years, COLA has increased by an average of only 2.9% — less than the 5.9% average increase in AMI.