Part 6/10:
The 10% cap on rent hikes means that a property initially rented at $2,500 can at most increase to $2,750 in a year. Over several years, this prevents landlords from keeping pace with market rent increases, especially in high-demand areas where rents are surging past these caps. Consequently, landlords may opt to sell or leave the market, further reducing supply.
In such an environment, investors and property owners are increasingly looking to states with fewer restrictions—like Florida, Texas, and Oklahoma—where regulatory burdens are less onerous. The result is a potential migration of capital and rental units away from California and other strict jurisdictions.