When Sacramento legislators won’t represent our interests, then we who rent have to do it ourselves. That’s the message sent by 447,834 voters to landlords. We signed a petition to put the Affordable Housing Act on the ballot in November. The measure would return to localities the authority to establish tenant protections that fit with local needs. That capacity was stripped by the state’s Costa-Hawkins Rental Housing Act. Now Costa Hawkins repeal is headed to the November ballot!
In a state where the Democrat-controlled legislature in the pocket of property interests, repeal of Costa-Hawkins is the ‘mother of all bombs.’ It does an end-run around the legislature – which recently bottled-up a Costa-Hawkins repeal bill in committee – to strike a law that bestows upon landlords a huge advantage relative to tenants.
Costa-Hawkins includes several key provisions that landlords won from lawmakers back in 1995:
- Costa-Hawkins exempts from rent stabilization any property permitted for occupancy after 1995 (when the law took effect).
- Costa-Hawkins exempts single-family homes and condominiums (another huge carve-out that keeps rents high).
- Exempts rental properties constructed over the past three decades, and even in the coming decades, from rent control.
Given the state’s crisis of rental housing affordability, can you imagine what happens should we actually build rental housing in the Southland only to find that none of those units will ever fall under our rent stabilization laws?
Beyond those exemptions, Costa-Hawkins allows for vacancy decontrol: landlords can raise the asking rent on vacant units to whatever the market will bear. (That’s not the case in New York City, for example, where the rent of an apartment remains controlled until some other conditions kick-in.)
One result of Costa-Hawkins is that tenant turnover allows a landlord’s asking rents to chase the market for rental housing. We are in the midst of a hot market and our Los Angeles-Orange County region is showing an overall annual increase of 5% in rents. That’s the least of it: asking rents in vacancy-decontrolled units will climb much, much faster than 5% annually.
From the landlord’s perspective, the Costa-Hawkins Rental Housing Act ensures that frequent turnover will effectively lets the rent roll begin to approach the returns enjoyed by fully decontrolled properties. Why? Because as each unit turns over it goes to market rent. No rental property owner in Beverly Hills is on the losing end (unless he wildly overpaid on the prospect of ever-increasing rents).
From a public policy perspective, vacancy decontrol provides the landlord with an incentive to evict a longtime tenant. Even if they have kids in the schools or are elderly or infirm. When there is no prohibition on no-just-cause evictions (as there is no such prohibition in Beverly Hills for 97% of our renting households) that is simply a license to evict, remodel and re-rent. We are seeing that more and more often – and we will continue to see tenants displaced as asking rents continue to rise.
An op-ed in the Los Angeles Times recently reminded us that Costa Hawkins is “devastating” to housing affordability in California. With the Affordable Housing Act measure on the ballot we voters can finally have our say.
If you are not registered to vote, then you now have incentive to register. Get right with the Registrar of Voters up to fifteen days before election day. Register now!
If you are already registered then you have one more reason to get to the polls in November: to take the gift that is the Costa-Hawkins Rental Housing Act away from the landlords. They’ve had this anti-affordability package tied up with a bow for way too long. Time to give back.
Did I say a gift? Well, I didn’t say it first. Landlord-friendly law firm Wasserman-Stern lavishly praised the law in a 2008 call to arms (since deleted but available in archived form). “One gift we sometimes fail to appreciate is that magnificent state law known as Costa-Hawkins,” said principal — and realtor! — David Wasserman. “When the local campaign season kicks off into high gear shortly, and you are asked to contribute your time and money to support worthy candidates and causes, remember Costa-Hawkins.”
Turns out he was prescient however a decade ahead of his time. Support the Affordability Housing Act by voting YES on this measure in November: Expands Local Governments’ Authority to Enact Rent Control on Residential Property.
Read more about the repeal campaign over at Tenants Together. Before the legislature tanked the repeal bill, we had a commitment here in Beverly Hills to lobby for returning local control over rent control to our city. We’ll see if Beverly Hills City Council agrees to support the ballot measure as our good neighbor West Hollywood has done. Bravo, neighbor!