Why California AB 2756 Was Vetoed: A Comprehensive Breakdown

Table of Contents#

1. What Was California AB 2756?
2. The Legislative Journey of AB 2756
3. Key Reasons for Governor Newsom’s Veto
   3.1 Burdens on Small Landlords and Overregulation Concerns
   3.2 Risks to Affordable Housing Supply
   3.3 Duplication of Existing State Protections
4. Stakeholder Reactions to the Veto
   4.1 Support from Business and Real Estate Groups
   4.2 Disappointment from Tenant and Labor Advocates
5. Implications for California’s Housing Future
6. Conclusion
7. References

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1. What Was California AB 2756?#

Introduced in February 2023 by Assemblymember Chris Holden (D-Pasadena), AB 2756 sought to expand tenant protections beyond California’s existing statewide rules (the Tenant Protection Act of 2019, or AB 1482). Its core provisions included:

• Extended Notice Periods: Mandating 60 days’ written notice for non-renewal of leases for tenants who had occupied a property for 12+ months (up from the current 30 days for month-to-month tenants in non-rent-controlled areas).
• Just Cause for Non-Renewal: Prohibiting landlords from refusing to renew a lease without "just cause," defined similarly to AB 1482’s eviction rules (e.g., non-payment of rent, lease violations, owner move-in, substantial renovations, or converting the property to non-residential use).
• Broad Applicability: Covering most residential rental properties, including those not subject to local rent control ordinances—filling a gap for tenants in areas without additional local protections.

The bill was designed to reduce sudden displacement, which disproportionately affects low-income families, elderly renters, and communities of color in California’s tight housing market.

2. The Legislative Journey of AB 2756#

AB 2756 followed a typical path through California’s legislature:

• Assembly Passage: In May 2023, the bill passed the State Assembly with a 55-21 vote, supported by most Democratic lawmakers and opposed by nearly all Republicans.
• Senate Review: It moved to the Senate, where amendments were made to exempt certain small-scale landlords (those with 10 or fewer rental units) from some provisions. The Senate approved the revised bill in September 2023 by a 29-11 vote.
• Veto: On October 7, 2023, Governor Gavin Newsom vetoed AB 2756, citing concerns about its impact on small businesses and housing supply.

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3. Key Reasons for Governor Newsom’s Veto#

In his veto letter, Governor Newsom outlined three primary concerns that led to his decision:

3.1 Burdens on Small Landlords and Overregulation Concerns#

Newsom emphasized that AB 2756 would impose unnecessary administrative and financial burdens on small landlords, who make up a significant portion of California’s rental market. Many small property owners (e.g., families renting out a single home or a handful of units) lack the resources to navigate additional compliance requirements, such as documenting "just cause" for non-renewal or extending notice periods. The governor argued that these costs could force small landlords to exit the rental market entirely, reducing the overall supply of available housing.

3.2 Risks to Affordable Housing Supply#

A central pillar of Newsom’s housing policy is increasing the state’s housing stock to address affordability. He warned that AB 2756 could discourage new housing development and incentivize landlords to convert rental units to other uses (e.g., condos, short-term vacation rentals) to avoid the bill’s lease renewal mandates. This, he argued, would exacerbate California’s housing shortage, driving up rents and making it harder for low- and middle-income Californians to find stable housing.

3.3 Duplication of Existing State Protections#

Newsom noted that California already has a robust framework of tenant protections in place via AB 1482, which establishes statewide rent caps (5% plus inflation, up to 10%) and just cause eviction rules. He argued that AB 2756 duplicated or expanded upon these existing laws without addressing the root cause of housing instability: a lack of sufficient housing supply. The governor stated that resources would be better spent on policies that accelerate housing construction rather than adding layers of regulation.

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4. Stakeholder Reactions to the Veto#

The veto sparked polarized reactions across California’s housing ecosystem:

4.1 Support from Business and Real Estate Groups#

Organizations representing landlords and real estate developers praised the veto. The California Apartment Association (CAA) commended Newsom for recognizing the bill’s potential to harm small landlords and reduce housing supply. In a statement, the CAA noted that "overregulation would have made it harder for small property owners to maintain their units and provide housing to Californians."

4.2 Disappointment from Tenant and Labor Advocates#

Tenant rights groups, such as Tenants Together, expressed deep disappointment. They argued that AB 2756 would have protected vulnerable tenants from arbitrary lease non-renewals, which often lead to sudden displacement and homelessness. Labor unions, including the California Labor Federation, also criticized the veto, stating that stable housing is critical for workers to thrive in California’s expensive economy.

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5. Implications for California’s Housing Future#

The veto of AB 2756 leaves California’s tenant protections largely unchanged, but it highlights an ongoing tension between two critical goals: protecting renters and expanding housing supply.

• Tenant Stability: Tenants in non-rent-controlled areas still face the risk of non-renewal with only 30 days’ notice, leaving many vulnerable to displacement.
• Policy Direction: Lawmakers may revisit similar legislation in future sessions, but any new bills will likely need to address the governor’s concerns—such as narrowing eligibility to exclude small landlords or adding provisions that incentivize housing development alongside tenant protections.
• Housing Supply Focus: Newsom’s veto reinforces his administration’s priority of building more housing. In the months following the veto, his office pushed forward with policies to streamline construction permits and fund affordable housing projects.

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6. Conclusion#

California’s AB 2756 was a well-intentioned effort to strengthen tenant protections, but its veto underscores the complex trade-offs inherent in housing policy. Governor Newsom’s decision reflected a focus on avoiding overregulation and preserving housing supply, while tenant advocates argued that the bill was necessary to protect vulnerable renters. As California continues to grapple with its housing crisis, the debate over balancing these two priorities will remain at the forefront of legislative discussions.

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7. References#

1. California State Legislature. (2023). Assembly Bill 2756. Retrieved from https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB2756
2. Newsom, G. (2023). Veto Message on AB 2756. Retrieved from https://www.gov.ca.gov/wp-content/uploads/2023/10/AB-2756-Veto-Message.pdf
3. Los Angeles Times. (2023, October 7). Newsom vetoes bill that would have required landlords to offer lease renewals to long-term tenants. Retrieved from https://www.latimes.com/california/story/2023-10-07/newsom-vetoes-bill-requiring-landlords-offer-lease-renewals-long-term-tenants
4. Tenants Together. (2023, October 7). Statement on Governor Newsom’s Veto of AB 2756. Retrieved from https://tenantstogether.org/news/statement-on-governor-newsoms-veto-of-ab-2756/
5. California Apartment Association. (2023, October 7). CAA Commends Governor Newsom for Vetoing AB 2756. Retrieved from https://caanet.org/news/caa-commends-governor-newsom-for-vetoing-ab-2756/