Why the Defeat of AB 1157 is a Win for All Californians
In a significant move for the California housing market, Assembly Bill 1157—a proposal that sought to expand and permanentize statewide rent control measures—has been defeated. While such bills are often framed as a shield for tenants, economists and housing experts increasingly recognize their failure as a victory for the very people they intend to protect. The defeat of AB 1157 is a win for tenants, rental property providers, and the state’s long-term economic health.
For tenants, the defeat of this bill ensures that the housing supply remains viable. Strict, permanent rent control often deters new construction. When developers cannot predict future returns under rigid price caps, they allocate capital elsewhere. By stopping AB 1157, California avoids a scenario where the “housing freeze” worsens, keeping the door open for the new units the state desperately needs to lower costs naturally through increased supply.
Perhaps the most relieved group is the “mom and pop” rental property providers. Unlike institutional landlords with massive portfolios, small-scale providers operate on thin margins. For these individuals, a rental property is often a retirement vehicle or a way to provide for their families. AB 1157’s permanent restrictions would have made it nearly impossible for them to keep up with rising costs—such as surging insurance premiums, property taxes, and maintenance expenses. The defeat of this bill allows these small providers to remain in business, preventing a mass sell-off of naturally affordable housing to corporate entities on Wall Street.
Furthermore, this is a profound win for the State of California itself. California is currently mired in a chronic housing shortage. Legislation like AB 1157 creates a “shadow market” and discourages property upkeep, leading to urban blight and a shrinking tax base. By rejecting a policy that has historically led to housing deterioration, the state maintains a more flexible housing policy environment that prioritizes production over price-fixing.
As the California Association of REALTORS® (C.A.R.) and other advocates have noted, the path to affordability is paved with more housing, not more hurdles. The defeat of AB 1157 sends a clear message: the state is choosing to protect the delicate ecosystem of the rental market. By supporting the rights of small property owners and encouraging a healthy supply of homes, California moves one step closer to a sustainable housing future that benefits every resident from the coast to the Sierras.
Source: California Association of REALTORS® (C.A.R.) https://www.car.org/aboutus/mediacenter/news/ab1157defeated