AB 1157 Stalls: California’s Rent Cap Holds for 2026
The bill that would have halved California's statewide rent-increase cap died in the Assembly Judiciary Committee, leaving Civil Code section 1947.12 unchanged.
The most ambitious attempt in years to tighten California’s statewide rent cap has stalled. Assembly Bill 1157, carried by Assemblymember Ash Kalra and styled by its sponsors the Affordable Rent Act, would have rewritten the core of the Tenant Protection Act of 2019 — lowering the permissible annual rent increase, pulling millions of single-family homes into coverage, and deleting the statute’s 2030 expiration. On January 13, 2026, the measure failed passage in the Assembly Judiciary Committee, the very committee Kalra chairs. It died on January 31, 2026, and was filed with the Chief Clerk under Joint Rule 56 two days later. For tenants and landlords planning around 2026 leases, the practical consequence is straightforward: the existing cap in Civil Code section 1947.12 stands, unchanged.
What AB 1157 would have changed
The Tenant Protection Act, enacted as AB 1482 in 2019, limits annual rent increases on covered units to 5 percent plus the regional change in the cost of living, with a hard ceiling of 10 percent, whichever is lower. AB 1157 proposed to cut that formula roughly in half: 2 percent plus the cost-of-living change, capped at 5 percent. It would also have amended the just-cause termination rules in Civil Code section 1946.2 and the related provisions of section 1947.13.
Two structural moves went further than the headline number. The bill would have removed the existing exemption for residential properties that can be sold separately from other dwellings — the carve-out that today leaves most single-family homes, condominiums, and individually owned townhomes outside the cap. And it would have struck the January 1, 2030 repeal date, converting a sunsetting experiment into permanent law. Section 1947.12 currently provides that it “shall remain in effect until January 1, 2030, and as of that date is repealed,” pending a Legislative Analyst’s Office review of the cap’s market effects.
How and where the bill died
AB 1157 did not fail for lack of a favorable venue. In the 2025 portion of the two-year session it advanced out of the Assembly Housing and Community Development Committee, then bogged down in Judiciary, where a first hearing was canceled at the author’s request in late April 2025 rather than risk a losing vote. Carried over into 2026, it was set for a second Judiciary hearing on January 13, 2026, and failed passage there. Under Article IV, section 10(c) of the California Constitution, a fiscal or policy bill not passed by the close of the first year of the session faces a hard deadline early in the second; AB 1157 was recorded as having died on January 31, 2026.
The arithmetic in committee tells the story. The proposal needed a majority of the Judiciary Committee to advance. Even with the chair as author, it could not assemble the votes — a recurring pattern for measures that would expand rent regulation, where a bloc of members declines to vote, and a non-vote functions as a no.
The Costa-Hawkins and Proposition 33 backdrop
AB 1157 operated only at the statewide-cap layer, which sits atop a deeper structural constraint. The Costa-Hawkins Rental Housing Act of 1995 bars local governments from imposing rent control on single-family homes, condominiums, and units first occupied after February 1, 1995, and guarantees owners the right to reset rent to market on vacancy. Nothing in AB 1157 touched Costa-Hawkins; it would have tightened the state ceiling that applies above local ordinances, not freed cities to regulate the housing stock Costa-Hawkins shields.
That distinction matters because voters were recently asked the larger question and answered. Proposition 33 on the November 2024 ballot would have repealed Costa-Hawkins outright and let localities expand rent control as they saw fit; it was defeated by a wide margin, the third such statewide rejection in six years. AB 1157’s more incremental approach — lower the cap, close the single-family exemption, drop the sunset — can be read as a legislative response to that ceiling on what the electorate will accept. Its failure leaves the field where it has been: a capped-but-permissive state floor, a constrained local layer, and a sunset clock still running toward 2030.
With AB 1157 dead, section 1947.12’s January 1, 2030 repeal date is no longer a distant abstraction. Absent renewing legislation, the statewide cap simply lapses on that date. Every failed expansion bill raises the stakes of the eventual reauthorization fight, because the default outcome of legislative inaction is not the status quo — it is the cap’s disappearance.
What stays in force for 2026
Because the cap was untouched, covered tenancies in 2026 remain governed by the 5-percent-plus-CPI / 10-percent formula, applied using each region’s published cost-of-living figure. The regional spread is wide: a Bay Area index near the low end of recent readings produces a ceiling in the low-to-mid single digits, while a higher Southern California figure pushes the permissible increase well above that. Owners must still serve the statutory rent-increase notice and, on covered units, may not raise rent more than the lower of the two formulas in any 12-month window. The just-cause termination rules of section 1946.2, and the relocation-assistance and notice obligations tied to them, likewise continue unaltered.
The structural exemptions AB 1157 sought to close also survive. Single-family homes and condominiums offered by an owner who is not a real-estate investment trust or corporation generally remain outside the cap, provided the required written exemption notice is given. Tenants and counsel evaluating a 2026 increase should therefore confirm two threshold questions before reaching the percentage: whether the unit is covered at all, and whether a valid exemption notice was served.
The road to 2030
AB 1157’s defeat does not end the debate so much as reset its timeline. The same coalition that backed it will likely return, and the pressure point is now fixed: the 2030 sunset guarantees that the Legislature must revisit the cap before the decade closes, whether to renew, narrow, or expand it. Whether the next vehicle mirrors AB 1157’s 2-percent ceiling or trims its ambitions to clear the committees that twice blocked it remains to be seen. For now, the operative law is the one already on the books — and the questions tenants and owners face in 2026 turn on Civil Code section 1947.12 as it reads today, not as it was nearly amended.
Golden Gate Legal Review publishes commentary and analysis on developments like these; it does not provide legal advice. Readers tracking the statewide cap can follow related coverage in the commentary section and the case tracker, and may find context in the earlier analysis of AB 1482’s impacts on tenants, landlords, and the housing market.
Questions readers ask
Did California lower its rent cap in 2026?
No. AB 1157, which would have cut the cap to 2 percent plus the cost-of-living change (capped at 5 percent), failed passage in the Assembly Judiciary Committee on January 13, 2026, and died on January 31, 2026. The existing 5-percent-plus-CPI / 10-percent cap in Civil Code section 1947.12 remains in force.
What is the current statewide rent cap?
Under the Tenant Protection Act, covered units may not see annual rent increases above 5 percent plus the regional change in the cost of living, with an absolute ceiling of 10 percent — whichever figure is lower.
Who authored AB 1157?
Assemblymember Ash Kalra of San Jose, who also chairs the Assembly Judiciary Committee where the bill twice stalled. Its sponsors called it the Affordable Rent Act.
What would AB 1157 have changed beyond the percentage?
It would have extended rent-cap and just-cause coverage to single-family homes, condominiums, and individually owned townhomes now exempt, and deleted the statute’s January 1, 2030 repeal date, making the cap permanent.
Why does the 2030 sunset date matter?
Section 1947.12 is currently set to be repealed on January 1, 2030. Unless the Legislature renews it before then, the statewide cap lapses entirely on that date — so legislative inaction does not preserve the status quo.
Does AB 1157’s failure affect Costa-Hawkins?
No. The bill operated only on the statewide cap and never touched the Costa-Hawkins Rental Housing Act of 1995, which limits local rent control on single-family homes, condominiums, and units first occupied after February 1, 1995, and preserves vacancy decontrol.
How does this relate to Proposition 33?
Proposition 33, defeated by voters in November 2024, would have repealed Costa-Hawkins and expanded local rent-control authority. AB 1157 was a narrower, legislative approach to similar goals; its failure leaves both the local-control limits and the statewide cap as they were.
Are single-family homes covered by the rent cap now?
Generally no, when offered by an owner that is not a corporation or real-estate investment trust and the required exemption notice is served. AB 1157 would have removed that exemption, but it did not pass.
What rent increase is allowed in my area in 2026?
It depends on the regional cost-of-living index applied to the 5-percent-plus-CPI formula, capped at 10 percent. The permissible figure varies materially between Northern and Southern California, so the applicable regional index must be checked for the specific 12-month period.
Could a similar bill return?
Likely. The same coalition is expected to try again, and the looming 2030 sunset forces the Legislature to revisit the cap before the decade ends. Whether a future bill mirrors AB 1157 or narrows its scope to clear committee remains open.
