“Costa-Hawkins Repeal” Effort May Be Heading Directly To Voters

This Monday, Michael Weinstein, president of the AIDS Healthcare Foundation, filed a proposed ballot initiative with Office of the Attorney General, aiming to repeal the Costa-Hawkins Rental Housing Act.

The ballot measure would send the issue of repeal directly to the voters, following the decision of Assemblymembers Chiu and Bloom to slow-track their legislative effort for repeal (AB 1506).

Costa-Hawkins was enacted to address what was referred to at the time of its enactment as “strict” and “moderate” rent control. Strict rent control (then in effect in Berkeley, Santa Monica, Cotati, East Palo Alto and West Hollywood) implemented price controls on rental units regardless of whether there were existing tenancies or a vacant unit was being offered to a new tenant. Moderate rent control (then in effect in San Francisco, among other cities), allowed a market rate increase whenever a tenant voluntarily vacated a unit.

Costa-Hawkins prohibited “vacancy control” (i.e., strict rent control), and it exempted single family homes and condominiums. It also prohibited cities with existing rent control ordinances from expanding the application of rent control to newer units (for instance, San Francisco’s ordinance only applies to pre-1979 construction), and it strictly exempted new construction units (defined as post-1995 construction) from rent control.

Titled the “Affordable Housing Act“, the ballot measure would repeal the Costa-Hawkins Rental Housing Act (Cal. Civ., ยงยง1954.50, et seq.) and add Civil Code Section 1954.54, dictating that “A city, county, or city and county shall have the authority to adopt a local charter provision, ordinance or regulation that governs a landlord’s right to establish and increase rental rates on a dwelling or housing unit”, adding that “a landlord’s right to a fair rate of return on a property shall not be abridged by a city, county, or city and county.”

According to the California Apartment Association, “The proponents of the measure to repeal Costa-Hawkins can begin circulating the petition to qualify the initiative for the November 2018 statewide ballot in approximately 60 days, following review by the state attorney general and the Legislative Analyst’s Office. To qualify the measure for the ballot, supporters must gather 366,000 valid signatures no later than June 28, 2018.”

Assuming the Affordable Housing Act ballot measure receives the required signatures, this is sure to be an interesting political fight.

The CAA takes the position that, “If local rent control ordinances are allowed to regulate rents on new construction and single-family homes, new private investment into rental housing will come to a screeching halt”. Meanwhile, Randy Shaw of BeyondChron.org and the Tenderloin Housing Clinic, Inc., recalls the “dark day” when Costa-Hawkins gained the legislative momentum required for enactment, but doubts the tenant rights bona fides of Weinstein in forming the necessary coalition to make this effort effective in the face of significant property management opposition.