Governor Newsom Signs Three Troubling Housing Bills

By Daniel Yukelson, Chief Executive and Executive Director

Three new housing bills taking effect on January 1, 2027, were signed into law by Governor Newsom, with two signatures occurring on the very last day to do so, on September 30, 2026. The three problematic and potentially harmful new laws were adamantly opposed by the Apartment Association of Greater Los Angeles from the very first day they were published, through committee and floor sessions in both houses of the legislature, and then to the vetoes requested from the Governor.

Unfortunately, despite expressed concerns about housing supply and affordability, and calls to protect smaller owners, by state and local legislators, it is clearly obvious all of that is “just talk.”

Senate Bill 868

Senate Bill 868. Senate Bill 868, which is informally known as the “Plug into the Sun Act,” was introduced by Senator Scott Wiener, who is now running for the U.S. Congress. This new law allows homeowners and renters to set up “portable solar generation devices” at a property to power electric devices.

The law defines “portable solar generation devices” as photovoltaic devices, which are devices that convert sunlight directly into electricity, that are designed to be connected to a building’s wiring through a receptacle and able to offset on-site electricity consumption. The law says a single dwelling can have devices with total AC output of no more than 1,200 watts, which must be certified by UL Solutions or an equivalent testing laboratory.

The Senate’s analysis of Senate Bill 868 identified concerns including overcurrent, fire, electric shock, failure of existing safety devices, and risks to ground-fault circuit interrupters. The Senate’s report further noted that distributed energy resources that are not properly reported can complicate and delay outage restoration. These concerns are particularly significant because portable solar systems are fundamentally different than ordinary appliances. Unlike a device that simply consumes electricity, a plug-in photovoltaic system can send electricity back through a building's electrical circuits, and improperly configured equipment can create fire and safety risks that may not be apparent to a resident or property owner. These safety concerns were left unresolved in the final version of this bill.

Moreover, Senate Bill 868 creates significant concerns for rental housing providers. The bill is specifically intended to expand balcony and plug-in solar access to renters and other residents. These systems may involve mounting equipment on balconies or other sections of a residential property. Property owners and managers have responsibilities to protect building infrastructure and the safety of residents, but Senate Bill 868 limits utility company oversight that would ensure distributed generation equipment is safely connected and operated.

Finally, the aesthetics of mounting multiple solar devices onto the outside of buildings and the likely web of wiring connecting them to wall outlets or electric-powered devices will not be pleasant.

Senate Bill 1296

Senate Bill 1296. Senate Bill 1296 by Senator Durazo is a complicated pet policy disclosure law, which, if not fully complied with, could result in legal exposure or become an affirmative defense for your renters in an unlawful detainer lawsuit. Senate Bill 1296 will cause many rental housing providers who have allowed pets at a property to reconsider and adopt a very simple pet policy: “NO PETS ALLOWED.”

If before charging an application fee a rental housing provider fails to disclose the established pet policy or pet addendum in accordance with this new law, and because of this failure to disclose the pet policy or pet addendum information the applicant is no longer eligible to rent the unit or declines to proceed with the application, the rental applicant may request a refund of the application fee by written notice, and the housing provider must refund the application fee within seven business days after receiving written notice.

However, refund of an application fee is not the only remedy. Senate Bill 1296 also includes a private right of action for damages, penalties, injunctive relief, and attorney's fees, which potentially expose housing providers to unforeseen legal liability. Senate Bill 1296 offers no stated remedy limitations and no cure period beyond a narrow "non-material error" safe harbor. Accordingly, Senate Bill 1296 is an invitation to derivative claims under Business and Professions Code Section 17200 and to affirmative defenses raised in unlawful detainer proceedings.

Senate Bill 1365

Senate Bill 1365. Senate Bill 1365 by Senator Ben Allen extends California’s declared emergency, anti-price gauging restrictions to lease terms that are longer than one year, and further limits exceptions to the ten percent (10%) price limits (“caps”) when costs had been incurred in excess of normal repairs and maintenance. The bill also limits the added allowable increase for providing a furnished rental unit to only an additional five percent (5%) above the ten percent limit.

Senate Bill 1365 changes how housing providers have been able to defend certain rent increases above the 10% declared emergency limit, which provided an affirmative defense when a renter had agreed to the increase before the emergency declaration, or when an increase could be directly tied to costs for repairs or additions beyond normal maintenance and repairs. However, under the new law, any such “over and above” maintenance and repairs must be incurred within the year before the emergency declaration, and applicable only if:

For any property operating under a strict rent control regime with rents that are far below market, Senate Bill 1365 makes catching up to market difficult when a vacancy occurs during a declared emergency.

In effect, Senate Bill 1365 imposes vacancy control by limiting rent increases during declared emergencies to no more than ten percent (10%) unless a housing provider can “thread the needle” on the now very limited safe harbor exemption.

For a state like California, which already has extensive renter protections, imposing statewide rent limits beyond Assembly Bill 1482, local rent control ordinances, and existing emergency price gouging restrictions merely adds yet another layer of regulation and increased compliance complexity along with the risk of inadvertent violations under a criminal statute.