Understanding the Costa-Hawkins Rental Housing Act: Implications for California Landlords EXPLAINED
Overview
The fate of the Costa-Hawkins Rental Housing Act, a pivotal law in California’s rental market, will soon be decided by voters in November. Enacted in 1995, this law has been instrumental in regulating rent control measures and maintaining housing market stability.
Key Points of Costa-Hawkins
Exemptions from Rent Control: Applies to single-family homes and constructions post-February 1995.
Vacancy Decontrol: Allows landlords to reset rents to market rates after a tenant leaves.
Historical Context: Implemented following extreme rent control measures in the 1980s, which reduced rental housing availability and quality.
Implications of Repeal
The proposed “Justice for Renters Act” seeks to repeal Costa-Hawkins, leading to:
Stricter Rent Control: Extends to all housing types, including single-family homes and newer apartments.
Elimination of Vacancy Decontrol: Prevents landlords from adjusting rents to market rates when a tenant vacates.
Automatic Stricter Policies: Several cities may adopt more severe rent control if the repeal occurs.
Impact on Rental Property Owners
Deterrence of New Investments: Potential for strict rent controls could discourage investment in new housing.
Decreased Property Values: Landlords might experience reduced property values and quality of rental housing.
Reduction in Rental Stock: Could lead to conversions for other uses or outright sales, reducing available rental housing.
Criticism of the “Justice for Renters Act”
Lack of Solutions: Does not address core issues like funding for affordable housing or immediate relief for homelessness.
Inflexibility: Any changes would require another statewide initiative, locking in potentially harmful policies.
TAKE Action
The California Apartment Association has initiated a campaign to educate voters on the repercussions of repealing Costa-Hawkins. This effort aims to preserve the Act to ensure a balanced and fair housing market.
