LAX Leader

Costa-Hawkins Rental Housing Act Threatened Again

The Costa-Hawkins Rental Housing Act is a state law that places limitations on local rent control laws. These limitations include exempting from local rent control any residential rental properties that are single family homes, condominiums, or residential properties built after 1995 or built after the passage of a local rent stabilization ordinance, whichever is earlier. In addition, Costa-Hawkins requires “vacancy de-control,” which is the right of a rental housing provider to establish the initial rental rate following a vacancy. This year, Costa-Hawkins is again under attack by the state legislature through Senate Bill 466.

Proposed State Legislation – Senate Bill 466

The proposed, state bill, Senate Bill 466 by Senator Wahab (D-Fremont), would dismantle one of the protections from rent control currently provided under Costa Hawkins by removing the right of housing providers to establish the rental rate unless a property had received a Certificate of Occupancy within the past 15-years. In other words, properties built since the passage of a local jurisdiction’s rent stabilization ordinance or 1995, whichever is earlier, will no longer be exempt from local rent regulations.

Instead, properties will only be exempted from local rent regulations if a Certificate of Occupancy for that property was received within the last 15-years. For example, properties subject to the City of Los Angeles’ Rent Stabilization Ordinance include properties that were issued a Certificate of Occupancy on or before September 30, 1978, and anything on or after October 1, 1978, are exempt from local rent control. If Senate Bill 466 passes and is signed into law by Governor Newsom, only properties that were issued a Certificate of Occupancy during the past 15-years will be exempt from the City of Los Angeles’ Rent Stabilization Ordinance.

If this proposed change to Costa-Hawkins is passed by the Legislature and signed by Governor Newsom, more than likely there will be further attempts to revise or eliminate Costa-Hawkins entirely. Without Costa-Hawkins, local jurisdictions could pass ordinances that eliminate “vacancy control” which is your right to set rent at the market when there is a vacancy.

We cannot allow this proposed “chipping away” of the Costa-Hawkins Rental Housing Act. TELL OUR LEGISLATORS TO VOTE NO, OPPOSE THE PASSAGE OF SENATE BILL 466. Act NOW, act TODAY, and call and email the elected officials listed below. Senate Bill 466 will be voted on in the Senate Judiciary Committee on March 28, 2023 at 1:30 p.m.

Let these Legislators know that:

• Local restrictions on rent increases for newer construction will force housing providers out of the rental housing business and only exasperate the State’s housing shortages and lead to higher rental rates.
• Oppressive rent control measures under local regulations will discourage construction of badly needed housing developments. The State of California will never catch-up on developing new housing units and meeting demand.
• Urge a NO VOTE on Senate Bill 466. After the three years rental housing providers have been through, with challenging rent collections and moratoriums on increases, Senate Bill 466 is not the right approach to solve our State’s housing problems. Senate Bill 466 will only exacerbate our housing crisis in California.

Contact These Legislators Today! 

Senator Thomas J. Umberg (Chair), (916) 651-4034, Senator.umberg@senate.ca.gov

Senator Scott Wilk (Vice Chair), (916) 651-4021, Senator.wilk@senate.ca.gov

Senator Benjamin Allen, (916) 651-4024, Senator.allen@senate.ca.gov

Senator Angelique V. Ashby, (916) 651-4008, Senator.ashby@senate.ca.gov

Senator Anna M. Caballero, (916) 651-4014, Senator.caballero@senate.ca.gov

Senator John Laird, (916) 651-4017, Senator.laird@senate.ca.gov

Senator Dave Min, (916) 651-4037, Senator.min@senate.ca.gov

Senator Roger W. Niello, (916) 651-4006, Senator.Niello@senate.ca.gov

Senator Henry I. Stern, (916) 651-4027, Senator.stern@senate.ca.gov

Senator Scott D. Wiener, (916) 651-4011, Senator.wiener@senate.ca.gov

EMAIL: (copy and paste)

Senator.umberg@senate.ca.gov , Senator.wilk@senate.ca.gov, Senator.allen@senate.ca.gov, Senator.ashby@senate.ca.gov, Senator.caballero@senate.ca.gov, Senator.laird@senate.ca.gov, Senator.min@senate.ca.gov, Senator.Niello@senate.ca.gov, Senator.stern@senate.ca.gov, Senator.wiener@senate.ca.gov

Text of the Justice for Renters Act: Title and Summary Cleared for Circulation

EXPANDS LOCAL GOVERNMENTS’ AUTHORITY TO ENACT RENT CONTROL ON RESIDENTIAL PROPERTY. INITIATIVE STATUTE. Current state law (the Costa-Hawkins Rental Housing Act of 1995) generally prevents cities and counties from limiting the initial rental rate that landlords may charge to new tenants in all types of housing, and from limiting rent increases for existing tenants in (1) residential properties that were first occupied after February 1, 1995; (2) single-family homes; and (3) condominiums. This measure would repeal that state law and would prohibit the state from limiting the right of cities and counties to maintain, enact, or expand residential rent-control ordinances. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on the state and local governments: Overall, a potential reduction in state and local revenues in the high tens of millions of dollars per year over time. Depending on actions by local communities, revenue losses could be less or more. Proponent Ashoke Talukdar, c/o Fredric D. Woocher, Esq. atfwoocher@strumwooch.com, needs 546,651 valid signatures by August 28, 2023. 

In addition, various well-organized, and extremely well-funded tenants’ rights groups have submitted a November 2024 ballot initiative similar to past Propositions 10 and 21. This latest threat to Costa-Hawkins, the so-called “Justice for Renters Act,” would completely dismantle Costa-Hawkins and would allow local jurisdictions to have complete control over regulating rental housing, including control over rental pricing upon a vacancy for all types of rental housing, including single family homes, condominiums and new construction. If this ballot initiative were to pass in 2024, all types of residential rental properties could be subjected to local rent control ordinances, and local governments could control rental rates for vacant units. Prior to the passage of Costa-Hawkins, cities like Santa Monica had “vacancy de-control” in place and controlled the amount rent housing providers could charge upon a vacancy. 

STAND BY AND BE READY TO ACT WHEN WE ASK YOU!

On February 28th, supporters of the proposed ballot initiative announced that the measure has been cleared for circulation and signature gathering. Like Propositions 10 and 21 before it, this ballot initiative is being underwritten by Michael Weinstein, the President of the AIDS Healthcare Foundation (See article, “Under Attack Again: Costa-Hawkins - What is It and Why Should You Care?” in the March issue of Apartment Age magazine.)

It Takes Money to Defeat These Harmful Proposals – Give TODAY!

Don’t let the proposed Senate Bill 466 and November 2024 ballot initiative, “Justice for Renters Act” gain traction and pass. Give us the financial support needed to FIGHT-BACK and to WIN! Help to ensure the voice of reason and common sense is heard and that your property rights and values are preserved. HELP US KEEP COSTA-HAWKINS ALIVE! Any and all contributions to our Political Action Committee will help us to achieve success in turning back the tide of regulations against us. Thank you in advance for your continued support! Contribute today at www.AAGLA.org/IssuesPAC. It took about $80 million to $90 million to defeat each of Propositions 10 and 21 – Please give generously. 

Original source can be found here