January 17, 2024
Mike Nemeth
CAA Marketing and Communications Direct
In the upcoming November election, California’s rental housing providers face an existential threat from a ballot measure that could overturn the state’s most important rental housing law and unleash widespread and unbridled rent control at the local level.
The so-called “Justice for Renters” Act seeks to overturn the Costa-Hawkins Rental Housing Act. For nearly 30 years, Costa Hawkins has been a fundamental part of California’s housing policy. This act exempts single-family homes and properties built after 1995 or earlier if they were in cities with rent control when Costa Hawkins passed. This provision of Costa Hawkins, often referred to as the “new construction exemption,” has been important by encouraging the development of new rental units throughout the state, particularly in communities that have rent control.
Moreover, Costa-Hawkins enshrines the principle of vacancy decontrol. This policy permits landlords to reset rental prices to current market rates once a tenant vacates a unit. Such adjustments are essential for property owners, ensuring that there is a return on the investment and that the owner can engage in property maintenance and improvements.
The initiative to repeal Costa-Hawkins comes from anti-housing activist Michael Weinstein and his organization, AHF. It’s not the first time such a measure has been presented to California voters. Weinstein’s previous attempts to undo Costa-Hawkins, Propositions 10 and 21, went down in utter defeat following campaigns led by the California Apartment Association and its campaign committee, Californians for Responsible Housing.
Potential outcomes of repealing Costa-Hawkins
If the Justice for Renters Act were to pass, it would invite a return to extreme rent control policies, like those observed in cities like Berkeley, San Francisco, and Santa Monica before Costa-Hawkins. This would reduce the availability and quality of rental units and deter the development of new rental housing and any additional private investment in upgrading and maintaining quality units.
Such a shift can hurt the very renters it purports to protect. Stricter rent control will lead to reduced maintenance and improvements in existing rental properties, as landlords find it economically unviable. Renters could face challenges in finding quality housing, and those seeking new accommodations might encounter heightened rental prices as the supply for any uncontrolled units become scarcer. The reduced turnover in rent-controlled units could also limit housing mobility, making it difficult for families to find appropriately sized homes. Ultimately, these factors could contribute to a less dynamic and less equitable rental housing market.
CAA’s response and advocacy
CAA is leading the charge against the Justice for Renters Act and has reactivated the Californians for Responsible Housing campaign team. Learn about the campaign at the website SaveCostaHawkins.com. Having handedly defeated Weinstein’s prior attacks on Costa-Hawkins, CAA is preparing for a substantial campaign this election cycle. Like the campaigns to defeat Props 10 and 21, this year’s campaign is expected to cost in the tens of millions of dollars. CAA will again educate voters about the far-reaching negative consequences of repealing Costa-Hawkins and its impacts on rental housing providers, renters, and California’s economy overall.
CAA urges rental property owners and industry stakeholders to join the effort to protect Costa-Hawkins. For additional information and to stay apprised of developments to defeat the Justice for Renters Act, join the campaign at SaveCostaHawkins.com.
To provide financial assistance to the campaign to defeat the Justice for Renters Act and other ballot measures detrimental to the rental housing industry, please visit CAA’s Issues Committee.
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