Costa Hawkins Repeal Headed for the Ballot?

California voters may have an opportunity in November to overturn the state’s Costa Hawkins law. It prevents localities like Beverly Hills from extending protections to all who rent housing — a “gift to landlords” (in their words) that has handcuffed local officials for decades. With the Affordable Housing Act initiative about to qualify for the ballot, the stakes are high. Let’s take a look at the proposed initiative’s objectives.

The effort to put the Affordable Housing Act on the November general election ballot is a grassroots response to the state’s rental housing crisis. We know that the rising cost of housing in California is outpacing household incomes. But the change in the cost of rental housing relative to changing consumer prices puts additional stress on households. And nowhere more so than in Southern California.

There are a number of reasons why high-and-rising rents here are stressing those who rent:

  • Cities are more attractive and are seeing a net in-migration of residents from other areas;
  • More households want or need to rent given the changing nature of households (more single-occupants) and/or declining rates of homeownership due to cost and means;
  • Increased competition for relatively scarce rental units means that all households feel the price pressure when more-advantaged households ‘trade down’ yet pay higher rents; and,
  • Local governments like Beverly Hills fail to prevent the loss of rentable units due to redevelopment, condominium conversion, unit combination and even short-term rentals.

The Affordable Housing Act enumerates no fewer than fourteen indicators to highlight the role that Costa Hawkins plays in increasing our rental housing crisis.

That goes for City of Beverly Hills too: we extend rent stabilization to all rental properties of two-or-more units except single-family homes, condominiums, subsidized housing, and, per Costa Hawkins, any dwelling unit created after February 1, 1995. That means that any new apartment buildings going forward are exempt from rent control.

What Does Costa Hawkins Mean to Beverly Hills?

We know what kind of properties are exempted under Costa Hawkins, but not how many renting households go without protections. In fact, those renting households go entirely uncounted: any family who who rents a single-family homes, accessory structures, or condominium shows up in no city tally. We simply don’t know how many non-RSO dwelling units are rented.

Our city only started our rent stabilized apartment inventory last year with the rental unit registry!

To understand how Costa Hawkins affects households in rental multifamily housing, I compared the city’s first-ever Rental Housing Initial Data Survey (April 2017) against the numbers of rent-stabilized units as recently disclosed by the rent stabilization program.

And there is a whopping difference between the earlier tally and the newer totals from the city’s rent stabilization registry: gone missing are 35 properties inclusive of nearly 1,000 units. (The Initial Data Survey counted 1,131 properties with 8,662 units but the number registered is 7,700 units in 1,100 properties.)

What accounts for the diminished number of rent stabilized units? A substantial proportion of units in the earlier inventory were likely exempt from rent stabilization and so were not registered — those single-family homes and condos. From the numbers it appears that about one thousand households that rent housing receive no local protections like the cap on annual increases and the relocation fee.

Costa Hawkins has taken a real bite out of tenants’ rights for many who rent in Beverly Hills. And most of them don’t even know they are without protections until the rent is raised 15% or they get booted without a relocation fee.

There is one other explanation but it is more problematic: the city has not properly accounted for all of the units that should be rent stabilized in the first place. In this theory, the 7,700 registered units does not represent the entirety of the units that should be registered. We have found condo buildings, for example, that due to a provision in Costa Hawkins should be registered as RSO properties under our local ordinance. (The city has not on its own identified any of them.)

We Need to Repeal Costa Hawkins

The Costa Hawkins exemptions from rent control greatly limit the reach of tenant protections here in Beverly Hills. And over time that exemption will only net more housing that is rented (and thus without local tenant protections).

Repealing Costa Hawkins would be the single most important step to take to support residential stability for those who rent in Beverly Hills. That’s why we should all go to the polls in November to cast our vote for the Affordable Housing Act ballot initiative.

The AIDS Healthcare Foundation has formed the Coalition for Affordable Housing to put the Affordable Housing Act to a vote of the people. If approved by voters in November, the initiative would repeal Costa Hawkins in order to return local control over rent stabilization to cities like Beverly Hills.

Affordable Housing Act illustrationThe Coalition has won endorsements of repeal from City of Los Angeles, West Hollywood and many community organizations. Even City of Beverly Hills expressed interest in supporting a state bill to repeal Costa Hawkins.

With Costa Hawkins out of the way, our city could extend rent stabilization to all tenants regardless of rental housing choice.