‘In for a big battle’: Californians petition to remove limits on rent control

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After garnering more than 100,000 signatures within the last month, the initiative to repeal the Costa-Hawkins Rental Housing Act — a 1995 state law that limits the scope of local rent control ordinances — is likely to appear on November’s ballot.

The Costa-Hawkins Act prohibits cities from establishing rent control on certain units, including single-family dwellings, condominiums and housing built after 1995.  It also has a “vacancy decontrol” provision that allows rent to increase after a tenant moves out.

The repeal of Costa-Hawkins originally appeared in front of the California State Assembly in January as AB 1506, but it failed to pass through the Assembly Committee on Housing and Community Development.

Berkeley Rent Stabilization Board commissioner Igor Tregub said he was disappointed that the attempt to pass the initiative through the state Legislature “narrowly failed.”

“I was also disappointed that it seemed that those who had concerns about the bill didn’t actively attempt to reach out to the bill’s authors,” Tregub said. “They had over a year to do it.  They had a lot of time.”

For San Francisco resident Charitie Bolling-Tosuner — a spokesperson for the Alliance of Californians for Community Empowerment and a proponent of the campaign  a rent control policy could help a lot. Living in a single-family home that has faced a $2,000 rent increase in the last year, Bolling-Tosuner said installing rent control policies would help families like hers who are facing homelessness.

To Bolling-Tosuner, a lack of rent control is another “form of eviction” because families are forced to move when rents increase.

“A lot of people are tired of the false promising,” Tosuner said. “The ‘build, build, build’ solutions to the housing crisis. Entire communities are being wiped out, and it’s all for their profit.”

According to David Garcia, the policy director at the campus Terner Center for Housing Innovation, while rent control policy helps tenants to secure affordable housing, the policy also has the “unintended effect” of raising the cost of overall housing with a lower housing supply.

Garcia added in an email that he is concerned that the repeal of Costa-Hawkins could enable cities to use rent control policies as a “de facto ban on new housing.”

“In the absence of Costa Hawkins, a city could impose rent control on every unit, including new construction, which would make it extremely difficult for a builder to obtain financing for a project as banks and investors see rent control as a significant risk to any investment,” Garcia said in an email.

Mike Nemeth, a spokesperson from the California Apartment Association, said in an email that the “crux” of the housing crisis lies in the housing supply shortage — something that a repeal of the Costa-Hawkins Act would worsen.

“I would just say that we are in for a big battle,” Nemeth said in an email.  “Although tenant groups have good intentions, rent control fails wherever it is attempted. San Francisco, long a rent-controlled city, has one of the worst housing shortages, and among the highest housing costs, in the nation.

But for City Councilmember Ben Bartlett, the repeal of Costa-Hawkins will especially help small businesses sustain themselves, and it will in turn create jobs and support neighborhoods.  He added that allowing landlords to reset rent to a high market rate is a “destructive element” of the act.

“It’s like a tourniquet getting tighter and tighter on your leg. … There’s no sustainability. That’s why you see empty storefronts when you jog around,” Bartlett said. “We need a more efficient apparatus to protect our small business. All these things we can do and more if we can free our hands from Costa-Hawkins.”

Alicia Kim is the lead businesses and economy reporter. Contact her at [email protected] and follow her on Twitter at @aliciackim.

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  • do you want no housing supply? this is how you get no housing supply

  • Matthew Barnes

    Oh cr*p. Hows about this instead? Do what Massachusetts did – remove rent control entirely. Did the sky fall in BBC? Why, no, it didn’t.

  • hoapres

    If you can’t afford to live here then move.

  • hoapres

    Repeal of Costa-Hawkins would be a catastrophic mistake.

  • Alex

    If property owners are never allowed to raise rents with the market, they will never bother owning property to begin with, so developers will back out and supply will shrink to nothing.

  • lspanker

    Rent control is yet another example of the Law of Unintended Consequences, and how so-called
    “progressives” fail to grasp the most fundamental economic principle of supply and demand. A few lucky ones camp out in them for years, often long after their financial situations have improved and they no longer require low-income housing. Meanwhile, property owners take their units off the market because the rents they receive don’t compensate them for the trouble, and new housing doesn’t get built for the same reason. Net effect is rents go UP for everyone else, because the supply doesn’t meet the demand. Apparently this supply and demand stuff is a difficult concept for liberals to get, even though every third-world street vendor figured it out a long time ago…

    • hoapres

      Unfortunately you know too much by stating the obvious.

      • lspanker

        Sorry, I guess it’s just a bad habit of mine. :Oo

  • That Guy

    rent control is the ultimate in NIMBYism.