Category Archives: Costa-Hawkins

Owens v. City of Oakland: Court of Appeals Fleshes Out Meaning of “Dwelling or Unit” under State Law

california state seal

“When the owner of a single-family home rents bedrooms in the home to separate tenants, does the Costa-Hawkins Rental Housing Act exempt each of the tenants’ rooms from local rent control because the home is considered an exempt dwelling under the Act? Jonathan Owens rented out bedrooms in his home to three unrelated individuals. He contends the City of Oakland’s Housing, Residential Rent and Relocation Board (the Rent Board) and the trial court erred when they determined the rented rooms are subject to Oakland’s rent control ordinance. We agree with the Rent Board and the court and affirm the trial court order denying Owens’s petition for writ of mandamus.”

Landlord Jonathan Owens owns a single-family home in Oakland. He lives in the home and rents three individual bedrooms to three unrelated tenants. One tenant filed a petition at the Oakland rent board “alleging her housing became unsuitable due to disruptive construction work and hazardous conditions on the premises [and that] Owens failed to provide required notice of the Rent Adjustment Program and retaliated against her by terminating her lease when she complained about the construction work and sought a reduction in rent.”

Owens responded that her tenancy was exempt from the jurisdiction of the rent board because the entire property was “alienable, separate from the title of any other dwelling unit” – a status that would exempt the property from local rent controls under Costa-Hawkins.

What happened next was procedurally bizarre. The hearing officer dismissed the petition on a finding that the tenant was in arrears on rent without justification. However, for some reason, the hearing officer made a gratuitous finding that the tenancy was not exempt because the rental of individual rooms meant that no dwelling was “separately alienable”.

Owens appealed to the rent board commission – presumably to avoid any collateral estoppel effect of this determination and renewed his argument for exemption under Costa-Hawkins/ The rent board unanimously affirmed the decision. Owens then petitioned for writ of mandate in the superior court, and the court affirmed as well, on the narrow issue of Costa-Hawkins preemption. The First District Court of Appeal affirmed.

The decision is problematic for several reasons. First, the broad scope of the petition related to many things having nothing to do with rent adjustments. As a result of the judicial powers doctrine, the rent board likely lacked the jurisdiction to render any relief. To render such a determination on a dismissed petition compounded the overreach. Finally, to the extent that most of this was about eviction controls (which Costa-Hawkins does not regulate), it is puzzling that Owens did not raise the argument that Section 8.22.350E of the Oakland Municipal Code exempts owner-occupied homes from eviction controls, if the owner shares “kitchen or bath facilities” with the tenants. While the opinion does not discuss whether Owens shares such facilities, it can almost be assumed from the description “single family home” that he and all the tenants shared the same half-and-half carton when making their coffees.

The rule of law is also somewhat hollow. The purpose of eviction controls is to prevent landlords from circumventing rent controls by the expediency of terminating the existing tenancy and raising rates on a new one. A finding that this is a multi-dwelling property for rent control purposes has little effect if Owens can capriciously terminate tenancies whenever he wants to increase the rents. Further, from a policy perspective, it is inconsistent that the institutional landlord of a single-family home can escape rent control, but a mom-and-pop owner-occupying landlord cannot. Nonetheless, Owens is a warning that landlords should be particularly cautious in renting multiple rooms under different leases.

facebooktwitterredditlinkedinmail

Justin Goodman Featured in SF Apartment Magazine Legal Q&A for December 2019

Justin Goodman was featured in the Legal Q&A for the December 2019 issue of SF Apartment Magazine – the official publication of the San Francisco Apartment Association.

Justin evaluated a landlord’s obligations (to provide a habitable premises and to avoid disrupting a tenant’s right to quiet enjoyment) at times when PG&E is using rolling blackouts to preserve the power grid.

Justin and his colleague Shoshana Raphael also wrote a feature article “Up in Flames“, which explores a landlord’s duties to tenants and their rights and obligations to the City when their apartment building catches fire.


SFAA is dedicated to educating, advocating for, and supporting the rental housing community so that its members operate ethically, fairly, and profitably. SFAA’s is a trade association whose main focus is to support rental owners by offering a wide variety of benefits that address all aspects of rental housing industry.

facebooktwitterredditlinkedinmail

Justin Goodman Featured in SF Apartment Magazine Legal Q&A for November 2019

Justin Goodman was featured in the Legal Q&A for the November 2019 issue of SF Apartment Magazine – the official publication of the San Francisco Apartment Association.

Justin explored how to navigate a Costa-Hawkins increase against subsequent occupants, when the landlord suspects that the last original occupant has passed away, but the subsequent occupants continue to tender rent on their behalf.


SFAA is dedicated to educating, advocating for, and supporting the rental housing community so that its members operate ethically, fairly, and profitably. SFAA’s is a trade association whose main focus is to support rental owners by offering a wide variety of benefits that address all aspects of rental housing industry.

facebooktwitterredditlinkedinmail

“Proposition 10: 2.0”: Michael Weinstein’s Second Effort To Repeal Costa-Hawkins at the Ballot Box

california state seal

Proposition 10 boldly failed in the November 2018 election (with only a couple bay area counties voting “yes” in a majority). The battle over Proposition 10 was one of the most expensive in California history, and the “no” camp was ultimately successful in arguing that expanding rent control would “increase the states housing shortage, exacerbate overall affordability issues and hurt the investments of single-family homeowners”.

Not to be deterred, Michael Weinstein of the AIDS Healthcare Foundation is back with Proposition 10: 2.0:

Titled the Rental Affordability Act, it would seek to expand the authority of cities to regulate rents by changing several provisions of the Costa-Hawkins Rental Housing Act (including the name of the act itself, which must be synecdoche for “statewide unaffordable rental rates” for tenant advocates by this point.)

It would remove the “new construction” exemption, in favor of a 15-year phase-in period for newly built units. It would remove a lesser known provision that grandfathers in exemptions in local ordinances that pre-dated the act. Most sweeping, it would eliminate the language of “vacancy decontrol” and replace it with a state-wide policy authorizing local rent control ordinances. (This language would mostly be symbolic, given the landmark decision Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, where the Supreme Court first recognized this authority.) Finally, for cities administering a rent control ordinance, the Rental Affordability Act would restrict the rental rate to 15% above the rate for the previous tenancy (with no provisions evaluating the fairness of the previous rate – e.g., if it was leased to a family friend at a steep discount).

Unsurprisingly, the California Apartment Association has taken a position against the new initiative.

facebooktwitterredditlinkedinmail

SFAA, SFAR and SPOSFI Sue San Francisco over Sup. Ronen’s Rent Increase Legislation

california state seal

This week, the San Francisco Apartment Association, San Francisco Association of Realtors and the Small Property Owners of San Francisco Institute filed a petition for writ of mandate, seeking to permanently enjoin San Francisco from enforcing Ordinance 5-19, Supervisor Ronen’s legislation aimed at prohibiting “eviction by rent increase”.

facebooktwitterredditlinkedinmail

San Francisco Legislative Update (2019): Prohibition Against Tenant Harassment via Rent Increases

Seal_of_San_Francisco

San Francisco has amended the Rent Ordinance to add to the definition of “tenant harassment” and “misdemeanors” certain rent increases “imposed in bad faith with an intent to defraud, intimidate, or coerce the tenant into vacating the rental unit” in circumvention of the just cause for eviction provisions. This will include circumstances where:
(1) the rent increase was substantially in excess of market rates for comparable units;
(2) the rent increase was within six months after an attempt to recover possession of the unit: and
(3) such other factors as a court or the Rent Board may deem relevant.

According to the Board of Supervisors, this legislation was prompted, in part, by specific cases in recent years with headline-grabbing rent increases. Whether justified by comparables or not, the tenants in those anecdotes chose to vacate, rather than pay the rent (although, at least one sued over the same theory that the City has now codified).
Continue reading San Francisco Legislative Update (2019): Prohibition Against Tenant Harassment via Rent Increases

facebooktwitterredditlinkedinmail

California Proposition 10 (2018): Voters Reject Repeal of Costa-Hawkins

sfc-sfgate-logo

SF Gate reports on the defeat of Prop. 10 at the ballot. The measure to repeal the Costa-Hawkins Rental Housing Act “fell behind early and continued to trail by a margin of about 65 percent to 35 percent throughout the night”.

Proposition 10 followed AB 1506 (2017), a legislative attempt at repeal, which failed to get out of committee.

For now, cities remain capable of implementing new rent control ordinances. However, Costa-Hawkins will continue to limit the extent of local price controls (as cities cannot impose price ceilings on “new construction”, apply “strict” vacancy control to empty units, or extend rent control to new tenancies in single family homes and condominiums).

facebooktwitterredditlinkedinmail

San Francisco Chronicle Recommends No on Prop. 10

Citing a nearly universal rejection of rent control by economists, the San Francisco Chronicle recommends voting “no” on Proposition 10, the ballot measure aimed at repealing the Costa-Hawkins Rental Housing Act – a state law limiting and defining cities’ ability to impose rent control.

As the Chronicle describes it, “Prop. 10 would repeal the 1995 Costa-Hawkins Rental Housing Act, which protects properties built that year or later from rent control. The law also prevents cities with preexisting rent control laws from extending them to newer units; San Francisco’s ordinance, for example, remains limited to housing built before 1980. And Costa-Hawkins exempts single-family homes from rent control while guaranteeing property owners the right to raise rents to market value when units are vacated.”

facebooktwitterredditlinkedinmail

Supervisor Ronen Promises New Regulation To Penalize Excessive Rent Increases in Deregulated Rental Units

The SF Chronicle reports that Supervisor seeks to introduce an amendment to the Rent Ordinance that will add to the definition of “tenant harassment” an “excessive rent increase” that is intended to “defraud, intimidate or coerce the tenant into vacating” a rental unit. The proposed legislation would make it “unlawful for a landlord to endeavor to recover possession of a rental unit . . . by means of a rent increase that is imposed in bad faith with an intent to defraud, intimidate, or coerce the tenant into vacating the rental unit in circumvention [San Francisco’s eviction control laws].”

The proposed legislation would address the part of the “venn diagram” of tenant protection law where single family homes are subject to eviction control (if they are built before June 13, 1979) but are exempt from rent control if the tenancy commenced after 1995 (under the Costa-Hawkins Rental Housing Act). The logic of this law is that landlords can increase rents in these units without local restriction, but if they increase rents with the intention of causing their tenants to vacate, then the “real” purpose is to avoid eviction controls, not to get market rate rent.
Continue reading Supervisor Ronen Promises New Regulation To Penalize Excessive Rent Increases in Deregulated Rental Units

facebooktwitterredditlinkedinmail

Golden State Ventures, LLC v. City of Oakland Rent Board – (Unpublished) Clarity on the “Sold Separately” Requirement for Condominium Decontrol under Costa-Hawkins

“The Rent Board contends the “sold separately” exception does apply under our facts because plaintiff “admits that it has control of and owns the entire building at 840 55th Street, Oakland, California.” The Rent Board also notes the building’s four units are all connected within the structure, there are no units in the building that were not converted to condominiums, plaintiff negotiated to purchase all the units together, none of the units were sold to new occupants, and the complaining tenants continued to reside in their units just as they had prior to the conversion. Essentially, the Rent Board asserts plaintiff did not meet the “sold separately” requirement because it purchased the entire apartment building, regardless of how the transaction was structured. Plaintiff counters that the “sold separately” exception “applies rent control only to condominium subdividers [like Kolevzon], not to subsequent purchasers like Golden State.” Plaintiff is correct.”

In Golden State Ventures, LLC v. City of Oakland Rent Board, a landlord purchased four out of four of the condominium units in a single building in Oakland, and then increased the tenants’ rents by 125%. Apparently quite proud of this purchase, “In a blog posting discussing the acquisition of the building, plaintiff’s principal, Arlen Chou, stated: ‘The best part of the property is that as they are condominiums, they are EXEMPT from rent control! I will soon own a little island of rent control free property in a rising neighborhood in Oakland. Who said there are no deals in the Bay Area???’.”

However, while Costa-Hawkins decontrols “separately alienable” units (like single family homes) from rent control, a 2002 amendment “closed the loophole” where condominium subdividers obtained final map approval for sale, but then kept entire buildings – formerly apartments – as rent-control-exempt property, exalting form over function. As noted by the court in Golden State Ventures, LLC, “Such conduct was entirely legal at that time”, until the 2002 amendment required that the units be “sold separately to a bona fide purchaser” before decontrol applied.

Continue reading Golden State Ventures, LLC v. City of Oakland Rent Board – (Unpublished) Clarity on the “Sold Separately” Requirement for Condominium Decontrol under Costa-Hawkins

facebooktwitterredditlinkedinmail