2025 Legislative Wrap-Up: Key Outcomes for Multi-Family Investors

California’s 2025 legislative session was dominated by tenant protection and housing regulation proposals. Many bills that would have reshaped rental housing operations were either defeated, significantly amended, or remain pending on the Governor’s desk. For multi-family investors, the results bring both short-term relief and signals of where the regulatory landscape is headed.

Bills Stopped in Final Floor Fights

Two of the most significant threats to owners and operators were defeated in the closing days:

• SB 522 (Wahab) – Just Cause for Rebuilds: Would have imposed strict tenant protections on properties rebuilt after disasters.

• AB 1018 (Bauer-Kahan) – Automated Decision Systems: Targeted algorithmic tools used in screening and rent-setting. The bill was rendered inactive on the Senate floor.

Both measures, if passed, would have restricted operational flexibility and driven up compliance costs for property owners.

Bills Now on the Governor’s Desk

Several high-profile bills await Governor Newsom’s decision:

• AB 628 (McKinnor) – Habitability Standards: Requires every rental unit to include a functioning stove or refrigerator. If signed, owners may face new capital expenditures and turnover obligations.

• AB 246 (Bryan) – Social Security Tenant Protection Act: Allows delayed Social Security payments to be used as a legal defense in nonpayment eviction cases, potentially extending rent recovery timelines.

• AB 1414 (Ransom) – Tenant Internet Opt-Out: Grants tenants the right to opt out of landlord-provided internet services, potentially cutting into revenue from bundled amenity agreements.

These measures would directly impact operating budgets, lease structures, and eviction processes. Decisions are expected by October 13.

Other Proposed Bills Successfully Stopped

A number of other restrictive measures failed to advance past committees, including:

• AB 1157 (Kalra) – Rent Limits: Would have capped annual increases under AB 1482 at 5% or CPI+2%, whichever is lower.

• AB 1240 (Lee) – Corporate Ownership Limits: Sought to restrict large-scale ownership of single-family rentals.

• AB 1248 (Haney) – Rental Fees: Attempted to ban separate charges beyond base rent.

• SB 436 (Wahab) – Right to Redeem Tenancy: Would have extended pay-or-quit notices from 3 to 14 days.

• SB 681 (Wahab) – Housing Reform Package: Contained fee-limiting provisions; never reached a hearing.

• SB 789 (Menjivar) – Vacancy Tax: Proposed mandatory reporting and penalties for commercial vacancies.

For investors, the defeat of these bills preserves flexibility in rent-setting, fee structures, and notice timelines.

Amendments That Softened Impact

Although not all measures were stopped, key amendments made several bills less onerous:

• AB 414 – Security Deposits: Now allows mutual agreements on refund methods and clarifies notice delivery options.

• AB 863 – Language Requirements: Shifted translation duties from landlords to the state’s Judicial Council.

• SB 262 – Pro-Housing Policies: Removed rent stabilization and eviction defense funding before passing.

These changes significantly reduced compliance burdens compared to the original drafts.

Investor Takeaway

The 2025 session ended with most of the most restrictive bills defeated or defanged, giving multi-family owners a degree of near-term stability. Still, the volume of tenant-focused legislation signals continued political pressure in Sacramento.

• Upside: No new rent caps or fee bans this year, and algorithmic pricing tools remain in play.

• Watchlist: Appliance requirements, eviction defenses tied to Social Security payments, and internet service opt-outs could still reshape operating budgets if signed.

• Next Year: Several “two-year bills” are likely to resurface, keeping regulatory risk elevated.

Bottom Line: Even though the legislative outlook remains challenging, the 2025 session closed with meaningful wins for housing providers. Investors should monitor the Governor’s pending decisions closely and prepare underwriting models for potential new compliance costs.