Costa-Hawkins Rental Housing Act Facing Repeal Efforts
By DANIEL BORNSTEIN, ESQ.
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With California’s acute housing shortage, lawmakers served up a package of bills that would go a long way to addressing this intractable problem, but it won’t be a panacea. In fact, it's been estimated that California must build 100,000 more units a month than currently planned, to solve the deficit. In the hallowed halls of Sacramento, there are sure to be more wide-reaching proposals to be debated, but none more damning to the rental housing industry than the repeal of the Costa-Hawkins Rental Housing Act. The repeal died on the vine this year, but it will be revisited in 2018.
For those who did not get the memo, Costa-Hawkins exempts from rent control units built after 1995, as well as single-family homes or condominiums. More importantly, it prohibits cities from restricting rent increases on vacant rental units, spawning the term “vacancy control”.
If repealed, the absence of Costa-Hawkins does not impose vacancy control in the cities of San Francisco or Oakland, where it never existed. The repeal would, however, leave open the possibility that these localities enact vacancy control as one option to address the affordability crisis. Put your seat belts on and get strapped in for a fight on two fronts.
San Francisco Assemblymember David Chiu and a pair of other lawmakers introduced a bill that attempts to roll back Costa-Hawkins, while a well-funded campaign is underway to further a proposed ballot initiative. The primary architect of that statewide ballot is the Alliance of Californians for Community Empowerment (ACCE), a nonprofit community organizing group that enjoys widespread support for tenant advocacy groups and the AIDS Healthcare Foundation. The ACCE has proved to be a formidable opponent, pouring $5 million into Prop S, a measure that would restrict development in Los Angeles.
A bill co-sponsored by San Francisco Assemblymember David Chiu and two other lawmakers was introduced earlier this year and seeks to roll back the rental act that for more than two decades has limited local jurisdictions from ramping up rent-control protections. Simultaneously, leaders of the tenant advocacy group Alliance of Californians for Community Empowerment and the Aids Healthcare Foundation last week filed a proposed ballot initiative that also aims to repeal Costa Hawkins.
If you’ve been following us for any length of time, it should go without saying that we are opposed to the repeal of Costa-Hawkins, but if we were gamblers, we would bet that Costa-Hawkins will remain the law of the land. Although we are cautiously optimistic that efforts to repeal it will be defeated, given the militancy of certain groups, expect an acrimonious battle.
Of course, Bornstein Law will keep you in the know as developments take shape.
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