Key California Rental Market Changes in 2024 and What They Mean for 2025

2024 was a pivotal year for California’s rental market, with significant legislative updates and voter decisions shaping the future for landlords and tenants alike. From Proposition 33’s rejection to new rental regulations, these changes are setting the tone for 2025. Here’s a comprehensive recap of the major developments and their implications for property owners in Sacramento, Roseville, Fairfield, and beyond.

Proposition 33: Voters Reject Expanding Rent Control

A key ballot measure this year, Proposition 33, aimed to repeal the Costa-Hawkins Rental Housing Act, which limits rent control in California. If passed, it would have allowed local governments to impose rent control on newer properties and single-family homes.

However, voters decisively rejected the measure, reflecting a statewide concern over the potential impact on housing development and rental availability. For landlords, this decision preserves the existing rules, ensuring properties built after 1995 and single-family homes remain exempt from rent control.

New Statewide Tenant Protections

California also saw the introduction of expanded tenant protections in 2024, including:

• Mandatory Relocation Assistance: Landlords must now provide relocation fees in specific no-fault eviction scenarios, such as substantial renovations or property conversions. These fees can range from $9,000 to $30,000, depending on the tenant’s circumstances.
• Just-Cause Eviction Requirements: Just-cause eviction laws now apply to a broader range of properties, including single-family homes and accessory dwelling units (ADUs), requiring landlords to meet specific criteria before evicting tenants.

These measures aim to balance tenant stability with property owners’ rights, but they also highlight the importance of detailed lease agreements and compliance with local laws.

Los Angeles’ New Rental Regulations

In December 2024, Los Angeles implemented a new set of rental regulations, which include:

• Annual Fee per Unit: Property owners must pay $31.05 per unit annually to fund tenant protection enforcement.
• Mandatory Inspections: Landlords must conduct regular property inspections to ensure compliance with health and safety standards.
• Expanded Rent Cap: The city expanded its rent increase cap, limiting annual rent hikes to 5% plus inflation or 10%, whichever is lower.

While these changes are specific to Los Angeles, they signal a growing trend of stricter rental laws in urban areas, which may influence other cities, including Sacramento and Fairfield, in the near future.

Sacramento Rental Trends in 2024

Sacramento’s rental market saw significant growth in 2024, driven by:

• High Demand for Single-Family Rentals: With more families seeking spacious housing, single-family rental properties continue to dominate the market.
• Rising Rental Rates: Average rents in Sacramento increased by approximately 8%, reflecting ongoing demand and limited inventory.
• Tenant Expectations for Upgraded Amenities: Tenants increasingly value energy-efficient appliances, smart home technology, and well-maintained properties, making upgrades a key investment for landlords.

Looking Ahead to 2025

As we move into 2025, California landlords should prepare for:

1. Increased Regulatory Oversight: More cities are likely to adopt stricter rental regulations, mirroring trends in Los Angeles and other urban areas.
2. Tenant-Centric Policies: Legislators will likely push for additional tenant protections, such as expanded rent caps and eviction rules.
3. Sustainability Requirements: Expect a focus on eco-friendly upgrades, including energy-efficient appliances and solar installations, to comply with California’s sustainability goals.

Staying informed and proactive will be critical for property owners navigating these changes.

Partner with Real Property Management Select for 2025 Success

At Real Property Management Select, we’re committed to helping landlords in Sacramento, Roseville, Fairfield, and surrounding areas adapt to California’s evolving rental market. From regulatory compliance to tenant management, our team provides the expertise you need to protect your investments and maximize returns.

Contact us today to learn how we can support your property management needs in 2025 and beyond.