Appeal of Costa-Hawkins Rent Control on Horizon

Attempts in Assembly, as initiative

California state law bans local governments from imposing rent control on any new apartment construction. The law — the Costa-Hawkins Rental Housing Act — defines new construction as dwellings with certificates of occupancy issued after Feb. 1, 1995. 

Costa-Hawkins also prohibits regulating rents on single-family dwellings and individually owned condominiums and townhouses 

Moves to repeal this law have appeared on two fronts: one in the State Assembly, the other as an initiative to place the appeal on the November 2018 ballot. 

Assembly Bill (AB) 1506 would flat-out kill the law, called the Costa-Hawkins Rental Housing Act.  The ballot initiative, known as the “Affordable Housing Act,” would also spell the end for the law.

Last February, Bonta joined Assemblymembers David Chiu and Richard Bloom in introducing Assembly Bill (AB) 1506. “The Costa-Hawkins Rental Housing Act prescribes statewide limits on the application of local rent control with regard to certain properties. This bill would repeal that act,” the Legislative Counsel Digest advised. 

The Digest also says what happened: “Appropriation: No: Fiscal Committee: No; Local Program: No.” The bill never made it to the Assembly floor. 

Proponents of the measure to repeal Costa-Hawkins, called the “Affordable Housing Act,” will soon begin circulating petitions to qualify the initiative for the November 2018 ballot. 

“Rents for housing have skyrocketed in recent years, they said in the Oct. 23 filing.” Median rents are higher in California than any other state in the country, and among all 50 states.”

In addition, advocates for overturning Costa-Hawkins point out that the federal government considers rent as not affordable if renters spend more than 30 percent of their income on that expense. 

The state of California has found that not only do more than half of California renters pay at least that much, but one-third of the state’s renters, some 1.5 million, pay 50 percent of their income for rent. 

Supporters of the initiative will have 180 days from the summary date — currently set at Dec. 27 — to collect the necessary amount of signatures — 365,880.  

Opposition for the repeal of Costa-Hawkins will come, as it did earlier this year, from the California Apartment Association (CAA) and other real estate interests. 

The Sacramento Bee reported last February that pressure from these interest groups forced Bloom to put a hold on his attempt to repeal the law.  

The Bee reported that, when Bloom attempted to move his Costa-Hawkins repeal forward in February, he “received significant pushback … from landlords and Sacramento lobbyists representing the state’s lucrative real estate industry.”

The CAA fears that, “If new construction and single-family homes are not protected from rent control, private investment into rental housing will come to a screeching halt. 

“This will stymie the buiiling of new apartments thus worsening an already dire housing crisis.”