California rent control update

california state senate bill SB-466

A measure which would expand the number of properties in California which could be subject to rent control is working its way through the State Senate. The bill, SB-466, would allow local jurisdictions to impose rent control on any multifamily rental property in the state 15 years after the property first received its certificate of occupancy.

Negating Costa-Hawkins

SB-466 was introduced by Democratic Senator Aisha Wahab. It seeks to modify the Costa-Hawkins Rental Housing Act, which passed in 1995. Costa-Hawkins exempts buildings constructed after 1995 from local rent control ordinances.

SB-466 is targeted at multifamily housing and exempts single-family homes and condominiums from its provisions. It does allow for vacancy decontrol so that property owners can raise rents to market rates once a resident moves out of an apartment.

Supporters of the bill argue that current California law results in a patchwork of dates in different jurisdictions within the state at which properties may be subject to rent control. They argue that it is not necessary to exempt new rental housing indefinitely from rent control in order to encourage new supply to be created. They also point out that the bill does not itself impose rent control; it only allow local jurisdictions to impose it.

The California Apartment Association is opposing this bill. They point to research that concludes that imposing rent control leads to a reduction in the production of new housing as well as a degradation in the quality of existing housing.

The usual suspects

Leading the support for the bill is the AIDS Heathcare Foundation, the same group behind the Justice for Renters Act initiative which would repeal Costa-Hawkins entirely. Supporters of that initiative are currently gathering signatures in order to qualify it for the November 2024 ballot. The California Secretary of State’s office reports that, as of April 21, they had collected more than 25 percent of the 546,651 signatures required.

Update May 26, 2023: Backers of the Justice for Renter Act initiative announced that they had collected the number of signatures required to qualify it for the ballot and delivered those signatures to the California Secretary of State’s office. If the signatures are found to be valid, the initiative will appear on the ballot next year.