Costa–Hawkins Rental Housing Act
The Costa–Hawkins Rental Housing Act ("Costa–Hawkins") is a California state law, enacted in 1995, which places limits on municipal rent control ordinances. Costa–Hawkins preempts the field in two major ways. First, it prohibits cities from establishing rent control over certain kinds of residential units, e.g., single family dwellings and condominiums, and newly constructed apartment units; these are deemed exempt. Second, it prohibits "vacancy control", also called "strict" rent control.
If an apartment is under "vacancy control", the city's ordinance works to deny or limit an owner's ability to increase its rent to new tenant(s). It works this way even in cases where the prior tenant voluntarily vacated the apartment or was evicted for a 'just cause' (such as failure to pay rent). In other words Costa–Hawkins, by now prohibiting "vacancy control" in the above voluntary or 'just cause' circumstances, mandates that cities allow an apartment owner the right to rent the vacancy at any price (i.e., usually the market price).
Rent control in California is largely the creation of its municipalities. This ability of city governments is limited by the federal and state constitutions, as well as federal and state laws. Costa–Hawkins is a key state statute enacted to manage the power of California cities to regulate their rental markets.
- 1 Factors causing 1970s rent control
- 2 The Costa–Hawkins legislation of 1995
- 3 Rent control in California
- 3.1 Legal context
- 3.2 Usual provisions
- 3.3 Opposition to rent control
- 3.4 List of California cities
- 4 Effect of the Costa–Hawkins Act
- 5 Court interpretations of Costa–Hawkins
- 5.1 Palmer (2009): rentals in inclusionary housing
- 5.2 Certificate of occupancy: Burien LLC v. Wiley
- 5.3 Mosser rule: children per 'vacancy control'
- 5.4 Mak: "Just cause" notice & 'vacancy control'
- 6 Recent events in California
- 7 Bibliography
- 8 References
- 9 External links
Factors causing 1970s rent control
The late 1970s saw the second wave of rent control ordinances in California, and nationwide. Rising real estate values and surging interest rates made single family homes in California less affordable. Disappointed buyers often moved into apartments. A rental housing shortage appeared, rents went up. For chiefly non-housing reasons (e.g., land use), cities began restricting the building of new dwelling units. As prices rose for rental housing properties, return on investment and cash flow motivated new landlords with mortgages to raise rents. State and federal low-income housing assistance fell. Inflation was economy-wide, yet wages and salaries also fell. The consumer movement and Proposition 13 effects then stimulated tenant activism in municipal politics.
The issues involved in rent control are complex and compelling, with multiple dimensions: personal, social, economic, political, legal. Often debates and discussions are at risk of provoking a competition between overstatements. Some proponents may call every raise "rent gouging" while some opponents say rent control leads to slums. "The range of assertions by rent control combatants [can be] astonishing." In the worse case, the "debate becomes a hollow clash of extremes, and the results are an uninformed electorate, rash policy, and a divided community." In 'second generation rent control' the issues have become more articulated, yet still contested.
The Costa–Hawkins legislation of 1995
Political events leading to the Act
In 1972 Berkeley became the first California city to adopt a second-wave rent control ordinance. In 1976 Governor Jerry Brown, a Democrat, vetoed state legislation (AB 3788) that would have preempted local rent control laws. It had been supported by a mainstream real estate group, the California Housing Council (CHC). In response to the veto, the real estate industry managed to get an initiative, Proposition 10, on the state ballot for 1980. It was soundly defeated, however, 65% to 35%.
In the meantime, in June 1978 Proposition 13 had been approved two to one by California voters. Before the election Howard Jarvis, the leader of the Prop. 13 'taxpayer revolt', as well as of the California Apartment Association, had suggested that landlords would lower rents if Prop. 13 passed. Many voters were said to have thought that Prop. 13, by lowering landlord property taxes, meant lower rents. The CHC, fearful of a tenant backlash if landlords failed to follow through, decided to oppose Prop. 13. Despite post-election efforts by Gov. Brown and the CHC, few landlords lowered their rents.
Across California urban tenants formed numerous local groups, which quickly grew in intensity and strength. Tenant activists organized political agitation directed at state and city government. Gov. Brown's new 'tenant hot line' was getting 12,000 calls a day. "In response to tenant pressure, rent strikes, and steady news coverage about rent increases and angry tenants, especially seniors, the Los Angeles City Council passed a six month rent freeze in August 1978." By 1988, fourteen cities had adopted full rent control, and sixty-four cities rent control for mobile home parks.
The strength of the tenants groups, however, eventually began to dissipate. Yet CHC attempts to partially 'preempt' rent control were thwarted by Democrats, led by State Senator David Roberti, until term limits forced his retirement in 1995. On the other hand, Democrat Jim Costa in the Assembly had unsuccessfully carried 'preemption' bills for the real estate industry since 1983. He was now in the Senate, where his 1995 bill passed the Judiciary Committee; absent Roberti, it drew Democratic votes. The bill then passed the Senate with one vote "more than the majority required."
The Act: sponsors, and opposition
The Costa–Hawkins Rental Housing Act became law in 1995. The statute became codified as Civil Code, §§ 1954.50 to 1954.535. The legislation's sponsors were Democratic Senator Jim Costa (Fresno) and Republican Assemblymember Phil Hawkins (Bellflower).
Introduced first in the Senate, the text of the legislation later became Assembly Bill 1164. After enduring several negotiated changes, it had passed in both chambers. The Republican Governor Pete Wilson then signed AB 1164 into law.
Although understood as limiting rent control, an agenda more favored by Republicans, some Democrats supported the Act. The pro-tenant Western Center on Law and Poverty (WCLP) had endorsed several features of the Bill that served tenant interests: the prohibition of rent increases "if serious health, safety, fire, or building code violations were discovered and not corrected for six months," and some claims by subtenants to lower rent under an existing tenancy.
The WCLP especially sought to organize the opposition, to "piece together a coalition" of scattered local groups (tenants, senior citizens, religion affiliated), together with California cities with rent control. Accordingly Santa Monica, Berkeley, and West Hollywood contributed funds to hire a lobbyist. A concession obtained was the 3-year phase-in of vacancy decontrol. Yet the capitol consensus was that Costa–Hawkins was a "done deal" and the opposition a "last gasp". With defeat and what they viewed as a rollback of some tenant advantages, rent control advocates became uneasy at the challenge to their victories of the 1970s and 1980s.
The Act's provisions as codified
The Act exempts from rent control: single family dwellings, condos, and new construction. It prohibits local government regulations re "vacancy control" in most situations. For the five cities with "vacancy control" in 1995 the Act is phased-in. It situates government contracts with owners about rent charged (e.g., provisions for low income housing), and the effects of a notice of violation, e.g., about health or safety. Costa–Hawkins also addresses subtenancies, and other issues.
Exemptions from rent control
The Act prohibits rent control on single family homes, on condominiums, and on newly built rental units. Generally, 'new' means any building constructed after February 1, 1995 (per the 1995 Costa-Hawkins Act). But for cities with existing rent control, 'new' is back-dated per the local rent control ordinance.
In those cities the enactment date of rent control determines what is 'new'. Only rental units constructed before then will remain subject to the city's rent control. Those built after will remain exempt under Costa-Hawkins. Hence, in San Francisco only construction older than 1979 can be rent controlled, and older than 1980 in Oakland and Berkeley, the years those cities passed their rent control laws. In the City of Los Angeles, the date is October, 1978.
These exemptions, however, may leave most of a city's total rental stock under rent control. For example, in San Francisco, as of 2014, about 75% of all rental units were rent controlled.
2002 Amendment to the Act
The Act was amended in 2002 to close a loophole related to condominium conversions after the 1995 Act. Owners of an apartment building may obtain a new certificate of occupancy due to a condo conversion even without then selling any converted units. In such case, the rental units do not become exempt from rent control under the Act.
Rent control in California
Costa-Hawkins is the key state legislation which serves to guide the operative provisions and practice of rent control in California. Yet it is the local governments, for the most part the cities, which actually write and adopt the specific rent control laws.
A local rent control ordinance may explicitly declare its purpose. Stated or implied is the finding, or assumption, that the rent control being enacted will in fact improve the community's well-being.
Usually rent control is a city-made law (a municipal ordinance) aimed at mitigating the disruptive effect, on neighborhoods and on individual renters, of escalating or fluctuating prices in the residential rental market. It may also seek to promote the maintenance of safe and habitable dwelling units during housing shortages.
An example of such city intent is San Francisco's Residential Rent Stabilization and Arbitration Ordinance (SFRO), enacted in 1979 as an emergency ordinance amending the San Francisco Administrative Code. It found that, in the face of tight markets and significant rental increases prior to rent control, "some tenants attempt to pay requested rent increases, but as a consequence must expend less on other necessities of life. This situation has had a detrimental effect on substantial numbers of renters in the City, especially creating hardships on senior citizens, persons on fixed incomes and low and moderate income households".
For the California State Assembly its analyst Stephen Holloway commented on the constitutional and legal context of rent control, specifically between the state and local governments (e.g., cities). When Costa–Hawkins was enacted, existing California law made "no statutory provision for, but does not prohibit, the adoption of local rent control ordinances. Case law, Birkenfeld v. City of Berkeley (1976) 17 Cal. 3d 129, held that rent control is a proper exercise of a local government's police power if it is reasonably calculated to eliminate excessive rents and at the same time provide landlords with just and reasonable returns on their properties."
In the 1997 Kavanau case, a rental property owner challenged the City of Santa Monica's rent control law as a form of "taking" or inverse condemnation prohibited by the federal Constitution. The California Supreme Court affirmed the rulings by lower state courts in favor of the City. In the 2005 Berger Foundation case, the California Court of Appeal upheld an ordinance which provided that the city council sitting as a rent board would determine what was fair, just, and reasonable regarding an owner's comparable return on investment. The ordinance did not establish a specific formula or procedure to apply when faced with a requested rent increase, but instead stated eleven factors to consider. Here the board had then relied on an expert's opinion.
Its chief provisions regulate the dollar amount charged the tenant each month. The political intent of most rent control ordinances, usually the sine qua non, directs the city's attention at the ownership, and limits its ability to raise the rent.
Percentage. A maximum permitted price increase may be expressed as a percentage of the existing rent. For example, Alameda 5%, Hayward 5%, Los Angeles 3%, Los Gatos 5%. In 2016 San Jose lowered the allowable annual rent increase from 8% to 5% of existing rent. In 2017 in Beverly Hills by an emergency ordinance, the rent raise maximum plunged from 10% to 3%.
CPI. Alternatively, rent raise limits may be directly keyed to changes in the cost of living, as measured by the Consumer Price Index (CPI). Since 1980 in California the CPI has generally been lower than 5%. Examples of rent control ordinances using CPI as an index: Oakland, Mountain View, Richmond. In San Francisco the SFRO limits annual increases to the lesser of 60% of the CPI or 7% of existing rent. Similarly, the Berkeley Rent Board allows an annual increase of 65% of CPI.
Vacancy control, in which the amount of rent charged for a rental unit (rather than for a tenancy) is strictly regulated by local government, is discussed below in "Vacancy control prior to the Act".
Every city or county with some variety of 'rent control' has its own, crafted law which may differ significantly in scope and content. Among the other issues a 'rent control' law might address:
- additional exclusions,
- rent mediation boards,
- condition of premises,
- rent registries,
- just cause terminations,
- relocation allowance,
- vacancy control.
Just cause terminations. A no-cause (or no-fault) rental termination by the owner is one that does not state a "just cause" (such as non-payment of rent, or a tenant-created nuisance). A city may require some form of "just cause" be noticed by an owner in order to terminate. But "just cause" is not required of evictions under state law. Other justifications may constitute "just cause", e.g.: (a) pursuant to government order; (b) to allow the owner's family to occupy the unit. Owners claim these laws limit their ability to deal with problem tenants who disturb their neighbors, e.g., by nuisance, domestic violence, criminal activity.
Relocation allowance. A city ordinance may require the owner to pay the departing tenant an allowance for moving and similar expenses, e.g., in event of no-fault termination. Each city has its own specifics. The tenant will not receive such an allowance in the event of "just cause" terminations, where the tenant is at fault (such as non-payment of rent, or creating a nuisance). But an owner's decision to end an existing tenancy (by written notice, by a court's eviction order) without the tenant being at fault, might trigger an owner's duty to pay the allowance. Withdrawal of a unit from the residential rental market is governed by the Ellis Act.
Vacancy control. Discussed below at "Vacancy control prior to the Act".
Opposition to rent control
Generally economists find fault with how rent control works over time: it reduces the supply of housing. In making the opposition argument, such general principles have been applied to California. Pro-rent control arguments are usually adopted by cities when enacting ordinances establishing rent control (see above).
Original rent control efforts sought to provide the public with affordable housing, but caused a fall in the number of new units being built, thus aggravating the housing shortage. Subsequent rent control laws exempted new construction. Yet such regulation also removes incentives to improve, or even maintain, older housing stock. It encourages owners to convert rentals to condos for sale or to other uses. Rent control laws provide short-term benefits without distinction: what is relief to low-income citizens, is windfall to wealthy renters. In dwelling units where municipal controls have set the rent below market, tenants stay longer, reducing the number of rentals available. Then market rents charged to new tenants go higher: (a) as owners counterbalance their rent-control losses, or (b) as builders of new units price the market demand versus supply. In brief, rent control reduces housing supply.
Economic conclusions are subject to interpretation by the public. Rent control that lowers rents for some can work to raise rents for others. Is it to be deemed 'good for society' if the total benefit amount to those favored with lower rents via rent control is cancelled by the program's unintended affect of raising the rent to others? What if its primary effect is merely to redistribute the cost of rent unequally rather than to reduce it overall. Is there an alternative? The authors of a recent 'Stanford paper' state, "If society desires to provide social insurance against rent increases, it would be more desirable to offer this subsidy in the form of a government subsidy or tax credit."
List of California cities
Over the last fifty years, out of a total of 482 California cities, perhaps two-dozen have enacted rent control ordinances, or lesser laws. A city may later discontinue its rent control, e.g., Santa Rosa voted to repeal its new rent control law in 2017.
With rent control ordinances
These are: Alameda, Berkeley, Beverly Hills, East Palo Alto, Hayward, Los Angeles, Los Gatos, Mountain View, Oakland, Palm Springs, Richmond. San Francisco, San Jose, Santa Monica, West Hollywood,
Additionally, Campbell (does not have rent control per se, but offers a mediation service), Fremont (rejected rent control in 2017), and Thousand Oaks (has limited rent control: mostly just for mobile home parks).
With limited rent control
With non-rent elements
Some cities have rental housing laws that do not control the amount of rent per se. Accordingly, these six have a mediation service: Campbell, Fremont, Gardena, Palo Alto, San Leandro, Union City. Definitions differ as to whether this would even count as "rent control". As noted above, Palo Alto declares that it has no rent control, but it does offers mediation over rent raises. On the other hand, Fremont lists as the third of six purposes for its mediation services: "Limit rent increases to fair and reasonable amounts."
Glendale's ordinance prohibits an eviction without just cause. But, like Palo Alto, Glendale declined 'rent control'. Almost all rent-controlled cities also prohibit evictions without just cause. Among California cities which do not control the rent amount, but do prohibit no-cause evictions: Glendale, San Diego, Union City.
Which refused rent control
Within the last few years, these cities either voted to repeal a rent control ordinance, or otherwise decided against rent control: Fremont (2017), Glendale (2013), Palo Alto (2017), Santa Rosa (2017).
From the section on non-rent elements (mediation and just cause eviction), depending on definitions, these cities might be added here (to those that refuse to actually control the rent amount): Campbell, Gardena, San Leandro, and Union City.
During the years from 1977 to 1983, the "voters of 22 cities [rejected] 27 proposed rent control initiatives." Among those cities that then avoided rent control: Pasadena (1977), Santa Barbara (1978), Santa Cruz (1979), Long Beach (1980), San Diego (1980).
Effect of the Costa–Hawkins Act
The major purposes of the Act were: to eliminate vacancy control and thereby reestablish an intermittent role for market forces (supply and demand) in setting the rental price; and, to exempt certain categories of rental units from rent control, e.g., new construction, and single family dwellings and condominiums. The exemption for new units sought to encourage housing supply.
Vacancy control prior to the Act
Most rent control ordinances (deemed moderate) limit an owner's ability to increase the rent to an existing tenant. Yet some strict rent control regimes also limited the rent a landlord could charge on the open market, that is, after the apartment became vacant by the voluntary exit of the prior tenant, or vacant by a just-cause eviction. Hence, strict was also called vacancy control. The controlled rental amount thus became specific not only to a particular tenancy, but also to a specific rental unit.
Under such a "strict" regime, market forces are excluded from price determination (except for exempt categories, such as newly built units). Prior to the enactment of Costa–Hawkins, such strict vacancy control had existed in five cities: Berkeley, Santa Monica, Cotati, East Palo Alto and West Hollywood.
Rent control elements denied to cities
Costa–Hawkins preempted local laws to allow 'vacancy decontrol', i.e., it abolished "vacancy control". Accordingly, the Act permits landlords to "establish the initial rental rate for a dwelling or unit" following voluntary departure by the prior tenants or following for cause evictions. For cities then with vacancy control, this preemption started the process of "vacancy decontrol" which was phased-in over three years. Accordingly, on January 1, 1999, it went into full effect.
The Act additionally exempted from municipal rent control certain kinds of dwelling units, namely, "separately alienable" units, i.e., single family houses and condominiums. The Act also exempted new construction, i.e., dwelling units with a certificate of occupancy issued after February 1, 1995.
Rent control elements retained by cities
The power to determine most of the elements of rent control (mentioned above) were left to the cities by the Act. Cities remain in control of changes to the rental amount of a tenancy, under constitutional limits. Cities possess a substantive jurisdiction to regulate evictions, and an owner's ability to otherwise end a tenancy. Accordingly, cities could prohibit an owner from terminating a tenant without "just cause". Also in terminations, the city by ordinance may place costs on an owner, and grant rights to a tenant, e.g., the relocation allowance.
Each California city may independently adopt and enact its own rent control ordinance. Those in force range across the spectrum. Counties in California may also enact rent control laws, in accordance with state law.
Court interpretations of Costa–Hawkins
In the two decades the Act has been on the books, a number of lawsuits have been filed citing it. Of those appealed, some became written case law. The 2009 Palmer case 'unexpectedly' upset local laws for inclusionary zoning per rental units. A few other cases are also discussed here. There remain questions about how to apply the Costa–Hawkins statute within the larger legal framework, e.g., its possible interaction with various, adjacent state statutes, and with varieties of municipal rent control and other ordinances.
Palmer (2009): rentals in inclusionary housing
'New construction' exemption applies
In Palmer/Sixth Street Properties LP v. City of Los Angeles (2009), the issue involved how to apply Costa–Hawkins to an inclusionary housing ordinance of the City of Los Angeles. Inclusionary housing laws (also called inclusionary zoning) apply to the construction of new multi-unit developments and seek to mandate the inclusion of some affordable units with price controls, along with a larger number of units to be sold on the free market. About one-third of California cities and counties have inclusionary zoning ordinances. Such laws might require, beside affordable units for sale, units for rent. In this case, a Los Angeles housing ordinance in effect mandated that sixty rentals for low-income tenants be included in Geoff Palmer's 350-unit development west of downtown.
The appellate court held, however, that the exemption from rent control of new construction under Costa–Hawkins applied to the particular facts of this case. Thus the city could not enforce its housing mandate against the real estate developer.
2013 bill to restore inclusionary rentals
The Palmer case thus removed rentals from the usual formula of inclusionary housing. Critics claimed, however, that the appellate court's opinion was "widely viewed as a misapplication of the Costa–Hawkins Act to a situation it was never meant to address." It sparked a political response in 2013 that aimed to adjust the Act. Accordingly, Assembly Bill 1229 was passed by the California legislature "to re-establish the legitimacy of affordable housing requirements for rentals."
Governor Brown's 2013 veto message
In October 2013 Governor Jerry Brown vetoed the bill. He said, "As Mayor of Oakland I saw how difficult it can be to attract developments to low and middle income communities. Requirements to developers to include below-market units in their projects can exacerbate these challenges, even while not meaningfully increasing the amount of affordable housing in a given community."
Advocates of affordable housing felt stymied. Yet there were alternatives that avoided the exemption for new construction under Costa–Hawkins: "the builder receives either financial assistance" or other valuable consideration such as a density bonus, and "agrees by contract with the city to restrict rents."
2017 bill 'fixes' Palmer re rentals
The legislature in 2017 approved a bill (AB 1505) that modified the court's ruling in Palmer. This bill restores to local governments the ability to require inclusionary rental housing for low income households, hence in effect setting their rent amount. Yet it allows for state oversight by a review (per a feasibility study) of such municipal requirements if applicable to over 15% of the units of a development project. Governor Brown then signed the bill which was among a package of fifteen housing bills for California in 2017.
Certificate of occupancy: Burien LLC v. Wiley
In 2014 the California Court of Appeals clarified the Act's provision concerning a rent-control exemption based on a "certificate of occupancy issued after February 1, 1995." The provision was held to apply only to certificates of occupancy that preceded the residential use of the unit.
In Burien, LCC v. James A. Wiley the Landlord contended that this Costa–Hawkins exemption applies to buildings converted from apartments to condominiums (both residential uses), when a new certificate is issued for the latter. The court reasoned that the purpose of the statute's exemption is to promote construction and development that increase the supply of rental housing, not to promote token reclassification without such a result. "We conclude that section 1954.52, subdivision (a)(1), refers to certificates of occupancy issued prior to residential use of the unit."
Mosser rule: children per 'vacancy control'
In January 2015, the First District Court of Appeals decided that, while Costa–Hawkins allows a landlord to establish a new rental rate where the "original occupants" on the lease no longer permanently reside at the premises, this decontrol was not available to the landlord where a minor child, who moved in with his parents at the commencement of the lease, remained there after they had vacated. In Mosser Companies v. San Francisco Rent Stabilization and Arbitration Board, the appellate court affirmed the trial court's judgment. Commentary on the case states that Costa–Hawkins, "as written, does not permit vacancy decontrol until all lawful occupants vacate the premises." This, despite the landlord's argument that this constituted an intergenerational tenancy of a rent-controlled premises.
The Mosser rule was then expanded in July 2015 by the First District Court of Appeals, in T & A Drolapas v. San Francisco Residential Rent Stabilization and Arb. Bd.. This decision dealt with similar facts (a landlord attempting to raise the rent of the son of original lessees who had moved out). The court first found that, as the family had moved in prior to the enactment of Costa–Hawkins, even if the son was merely a subtenant, he would have been grandfathered in. Such a "subtenant" could be an "original occupant". The court, however, went on to find that he was also an original occupant under the Mosser rule, even though, unlike in Mosser, there was no evidence that the landlord knew about the son when the tenancy commenced.
Mak: "Just cause" notice & 'vacancy control'
In the September 2015 case Jason Mak v. City of Berkeley Rent Stabilization Board, the First District Court of Appeals interpreted Costa–Hawkins in the context of an evidentiary presumption in Berkeley's rent ordinance that presumes that, where a tenant has moved out after a termination notice, the tenant moved out because of the notice. One accepted way for a landlord to take possession of a rental unit is to use an "owner move-in" eviction, which is recognized as "just cause" to terminate a rent-controlled tenancy. Of course, the landlords are then required to move in and make the rental unit their residence for some minimum period (e.g., 36 continuous months). In such event, the Costa–Hawkins Act will thereafter decontrol the unit, i.e., allow it to be rented at market rate. Such decontrol is limited to "just cause" terminations, or where the prior tenant freely decides to moves out. The owner cannot, therefore, without "just cause" initiate the termination of a rent-controlled tenancy, then rent it at market rate to a new tenant.
The landlord in Mak served the tenant a notice of termination for an 'owner move-in'. But the landlord rescinded the notice, then entered into an move-out agreement with the tenant, in which the tenant recited that he was not moving out because of the prior notice. The landlord, however, did not move-in, but instead rented the premises to a new tenant. The Berkeley ordinance in question, when applied to these facts, raised the presumption that the prior tenant moved out because of the owner move-in notice. The landlords were not able to rebut this presumption when their new tenants challenged the validity of their market-rate rent. Accordingly, the vacant unit was still linked to the amount of the previous controlled rent, a situation to which the new tenants were entitled.
Recent events in California
Shortage of affordable housing, & HAA
The housing cycle that began with the crisis of the 1970s and 1980s has apparently come full circle. A housing shortage has recurred and apparently reached the crisis stage (See: California housing shortage). In a 2014 California treatise on real estate development, the authors opined that "[C]ommunities across California continue to confront the challenge posed by a scarcity of housing, particularly of affordable housing. In the last several decades, housing production in the state has lagged behind population and job growth, resulting in a housing deficit. ... While all citizens feel the impact of this housing shortage at some level, those with incomes at the lowest end of the economic spectrum of often bear the brunt of the shortage."
Regarding the shortage in California, the Housing Accountability Act (HAA) was recently strengthened by amendments. Its 2016 version states: "(a) The legislature finds and declares all of the following: ¶(1) The lack of housing, including emergency shelters, is a critical problem that threatens the economic, environmental, and social quality of life in California. ¶(2) California housing has become the most expensive in the nation. ... ."
Here the legislature aims to overcome the shortage by increasing the housing supply. The HAA imposes detailed limits on a city's power to restrict new housing construction. The recent HAA amendments, signed by Gov. Brown, were sponsored by three Democrats: Nancy Skinner, Senate – East Bay, Raul Bocanegra, Assembly – Pacoima, and Tom Daly, Assembly – Santa Ana.
Efforts to repeal Costa–Hawkins
By the legislature
On February 17, 2017, in the California Assembly, Democratic members Richard Bloom, Rob Bonta, and David Chiu introduced AB 1506, a bill that if passed would simply repeal wholesale the Costa–Hawkins Rental Housing Act of 1995. Given the vacancy decontrol and exclusions of Costa–Hawkins, its repeal would leave local governments free to control much of the residential rental pricing regulations, their reach, and similar issues. By April the bill was facing stiff opposition and bleak prospects in the legislature. It was then "parked in committee" until next year.
On January 11, 2018, chairperson Chiu (San Francisco) of the Assembly's Housing and Community Development Committee put Bloom's bill to a vote. It failed to pass. The two Republicans voted against. Democrats Ed Chau (Arcadia) and Jim Wood (Healdsburg) abstained. Apparently the thinking was that the statewide housing shortage gave legislative priority to increasing the construction of new housing. Perhaps a thousand proponents representing the opposing sides attended the vote.
By initiative: Prop 10
On October 23, 2017, the Alliance of Californians for Community Empowerment (ACCE) filed papers with the state Attorney General for a ballot measure which would repeal wholesale the 1995 Costa–Hawkins Act. ACCE calls the current rents across California too high, and out of control. To qualify for a November 2018 vote by the public, 365,880 signatures are said to be required.
Proponents announced in late April that they have enough signatures to qualify an initiative to repeal Costa Hawkins. Its supporters named it the "Affordable Housing Act". The initiative was Proposition 10 on the General Election ballot of November 2018.
On November 6, Prop 10 was decisively defeated, reported the Los Angeles Times; it endorsed the measure. The preliminary results with 100% of precincts reporting: 38% or 2,675,378 voted for, and 62% or 4,310,298 voted against.
Carol Galante, a professor of urban policy at UC Berkeley’s Terner Center for Housing Innovation postulated that Prop 10 may have been defeated because it would have opened the door for government regulation of rents on single-family homes; because 40% of the rental housing stock nationwide consists of single-family homes (predominantly owned by private individuals), this resulted in a large number of owners with the ability to vote against this proposition.
- W. Dennis Keating, Rent Control in California. Responding to the Crisis (Institute of Governmental Studies, University of California, Berkeley 1983), 24 pages. Accessed 2017-10-17.
- Allan David Heskin, Tenants and the American Dream. Ideology and the tenant movement (New York: Paeger 1983), re Santa Monica.
- Paul L. Niebanck, editor, The Rent Control Debate (University of North Carolina 1985), the editor was a UCSC professor.
- Peter Dreier, "Rent Deregulation in California and Massachusetts: Politics, Policy, and Impacts – Part I" (1997), "Part II" (1997), at International and Public Policy Center, Occidental College, Los Angeles. Accessed 2017-11-6.
- Cecily Talbert Barclay & Matthew S. Gray, Curtin's California Land Use and Planning Law (Point Arena: Solano Press 34th ed., 2014).
- West's California Jurisprudence 3d, v. 42: Landlord & Tenant (Toronto: Thomson & Reuters 2016, update 2017).
- David Brown, Janet Portman, Nils Rosenquest, The California Landlord's Law Book (Berkeley: Nolo Press 2017).
- Nancy C. Lenvin & Myron Moskovitz, "Practicing under Rent and Eviction Control Laws," Chapter 7 in California Landlord-Tenant Practice (Oakland: California Continuing Education of the Bar: updated 2017).
- The Act's complexities are abridged and simplified here.
- The 'newly constructed' designation may be more complicated than it appears. Any rental units built after the 1995 Costa-Hawkins Act would be exempt. But also, with regard to cities with existing rent control ordinances, the Act counts as "new construction' any built after that ordinance was enacted. See below the section "Exemptions to rent control".
- The "decontrol" of such "vacancy controlled" rents was phased-in over a three year period starting at the end of 1995.
- The Act also addresses incidental technical issues, such as, when such rents may be increased on a remaining subtenant.
- Here the issue is State of California limits put on its cities. Federal and State constitutions both establish and limit government power. Cf., the Tenth Amendment. Cf., Dillon's Rule.
- The Act also repeals or reforms various California state programs that subsidized qualified renters of residential dwellings. These provisions are mentioned below, but are not the focus here. The Act's 3-year phase-in for vacancy decontrol, and these reforms, complicate the language of the statute.
- See text below for source citations.
- The first wave was in the late 1940s, during the economic surge following World War II. Alisa Belinkoff Katz, "People are simply unable to pay the rent" What History tells us about Rent Control in Los Angeles, at UCLA Luskin Center for History and Policy, October 2018. Introduction by Zev Yaroslavsky. Accessed 2018-11-1. This study covers three rental housing crises and related rent control enactments in Los Angeles: the above post-war, the post-Prop 13 in 1979, and the current, on-going situation.
- "The California experience is representative of the range of public responses... ." Keating in Niebanck (1983), p.57.
- Lenvin and Moskovitz , ∮7.8 on factors causing rent control in the 1970s: rising real estate prices for homes and for apartment houses; economy-wide inflation; tight housing markets from short supply and high demand; the consumer movement).
- Sternlieb and Hughes, in Niebanck (1985), pp. 11–28: rent control by cities "dependent on national market factors" at p.11; own versus rent, and housing supply, at pp. 11–20; private investment in rental housing property, at pp. 25–28.
- Keating, in Niebanck (1985), pp. 57–73, at 57–59 (fall of tenant incomes, rise in rents; the housing shortage: vacancy rates, not enough new construction; low income households and percent spent on rent; housing subsidy cut-backs: fed policy & state budgets; Proposition 13; rent control in California), and at pp. 70–73 (growth and land use restrictions, increased fees and requirements for new housing construction; Proposition 13; very high mortgage interest rates; state budget problems limit its housing remedies; Proposition 13; policy trade-offs).
- Niebanck, in Niebanck (1985), pp. 105–122. After analysis of multiple issues in a city's rental economy, including market malfunction and two benchmarks (the vacancy rate, and income percentage spent on rent), the UCSC professor suggests: "A locality's interest in rent control has at least as much to do with underlying cultural, socioeconomic, political, and ideological factors as it has to do with market conditions" at pp. 110–111 (quote).
- Keating (1983), pp. 3–4. Sponsors of Proposition 13 claimed that tenants would share in the benefits of reduced property taxes. But after it passed, most landlords declined to do so. The legislature refused to heed the tenant protests.
- Heskin (1983): 1960s rental glut, 1970s fall in housing construction and rise in rents (pp. 32–33, 40–41); Prop. 13 and 'tenant revolt' (pp. xiv, 41, 47–49). Civil rights, anti-poverty, anti-war movements were followed by tenants who organized, first in college towns (p.32). Kerner Commission, p.102.
- Dreier (1997), Part I, "The Battle for Rent Control" at ¶¶ 8–10. Earlier tenant movements of the 1960s were "spillovers" from the civil rights, the poor peoples, and the student movements (¶8). He notes (at ¶10) that the Kerner Commission found that "housing problems among low-income tenants was the primary grievance behind the mid-1960s ghetto rebellions." The National Tenants' Organization, founded in 1969, was for a time widespread across America (¶8).
- Niebanck, in Niebanck (1985), pp. 106–107, quotes at 106.
- Heskin (1983) concludes that the vast majority of tenants remain committed to mainstream views of property ownership (pp. 34, 244, 247). He relied on results from two extensive tenant surveys taken in southern California (pp. xv–xvi, pp. 66–249). UCLA Prof. Heskin in his Preface had declared for the tenant movement, disclosing his work as a Legal Services lawyer and pro-tenant law reformer (pp. ix–x, 291). The author here explored the possibility that tenants in the movement, inspired by radical activists, might eventually 'fracture' the ideological norm and favor socializing a community's rental housing stock (pp. xii–xiv, 28–34, 239–243; "fracture" at pp. xiv, xviii, xxiii; "polarization" at p.xxiii, cf. 68–76).
- Heskin (1083), p.61: "a coalition of real estate developers, building trade unions, and landlords" formed to promote Proposition 10.
- Keating (1983), pp. 5–6: Although somewhat similar to Costa–Hawkins, in its details Prop. 10 would have been substantially different, e.g., Prop. 10 mandated that a city could not enact a just cause requirement for evictions. Re Berkeley 1972 (pp. 3, 4).
- Heskin (1983): Berkeley, CHC and AB 3788: Brown's veto (pp. 41–43); Prop.10 (pp. 61–63).
- Dreier (1997), Part II, at section "Rent Control in California", Jarvis at ¶5, CHC and Prop. 13 at ¶¶ 5 and 6b, Proposition 10 at ¶15.
- Keating (1983), pp. 3–4. Proposition 13 proponents: their unfullfilled promise to lower rents inspires tenants to mount a fight for rent control.
- Heskin (1983), p.47: Jarvis announced agreement between two landlord associations to lower rent if Prop.13 passed; p.48: statewide tenant revolt following Prop. 13 vote and few landlords pass on tax savings to tenants; p.49: landlord costs go up.
- Dreier (1997), Part II, at section "Rent Control in California", Governor's 'hot line' at ¶7, fourteen cities at ¶8, Los Angeles quote at ¶9.
- Keating, in Niebanck (1985). After Prop. 13, Los Angeles Mayor Tom Bradley moved from opposition into support for rent control. "Tenants then turned to local government for relief via rent control." Fourteen cities. A poll taken in May 1979 had Californians in favor of rent control 56% to 21%, tenants in favor 73% to 20%. At that time 55% of Californians were renters.
- Heskin (1983), pp. 39, 43–47, 48–49: 1970s growth of tenant movement; p.48: Governor's 'hot line'; pp. 50–55: tenant groups active in Los Angeles, rent freeze becomes rent control; pp.55–61, 63–65: in Santa Monica, Prop. A rent control, tenant majority on city council.
- Dreier (1997), Part II, at section "The Politics of Deregulation in California", Roberti anti-Costa at ¶¶ 2–3, Roberti term limits at ¶¶ 5–7, Costa in Assembly at ¶¶ 1–2, Costa in Senate at ¶¶ 6–9, tenant advocacy weak at ¶3, 9; at section "Rent Control in California", Roberti rent control at ¶3, tenant groups weaken at ¶16; at section "Comparative Analysis," subsection "Weakness and Fragmentation of Tenancy Constituency".
- Max Vanzi, "Legislature deals blow to rent control", in The Los Angeles Times, July 25, 1995. Sen. Jim Costa said the Act represented "an 11-year effort to try to end extreme forms of rent control in California."
- "California Civil Code, 1954.50–1954.535". Leginfo.legislature.ca.gov. Retrieved 11 July 2017.
- Dreier (1997), Part II, section "The Politics of Deregulation in California" at ¶1 & ¶8 re Costa.
- Phil Hawkins served one term in the Assembly, 1994–1996, where he "carved out a solidly conservative record on most issues". "Sally Havice (D) v. Phil Hawkins (R)", in The Los Angeles Times, Oct. 9, 1998. Accessed 2017-11-9.
- Cf., Analyses: AB 1164, Assembly Floor 7/25/95 – DIGEST. California Legislative Information website.
- Max Vanzi, "Legislature deals blow to rent control", in The Los Angeles Times, July 25, 1995: bill sponsors Phil Hawkins and Jim Costa; legislation quote per WCLP. Accessed 2017-08-28.
- Heskin (1983). On the Los Angeles City Council, black leaders voiced a different view of housing shortages. Earlier Robert C. Farrell had spoken of the "thousands of vacant and substandard housing units in South Central. ... My constituents want decent housing and a decent rent" (p.51, quoting the Sentinel, Aug. 10, 1978; also p.75 code violations, pp. 132–133 poor condition of rentals). Nationwide, some owners had abandoned urban rental properties that needed substantial repairs (cf. p.32).
- Dreier (1997), Part II, at section "The Politics of Deregulation in California". WCLP in opposition at ¶9 (coalition quote, two phrases quoted). WCLP was "an arm of legal services" (apparently LSC). Also: Dreier (1997) Part II, section "Comparative Analysis," subsection "Weakness and Fragmentation of Tenancy Constituency".
- Max Vanzi, "Legislature deals blow to rent control", in The Los Angeles Times, July 25, 1995: advocates alarmed.
- "California Civil Code, 1954.50–1954.535". Leginfo.legislature.ca.gov. Retrieved 11 July 2017.
- "A General Overview of California's Costa–Hawkins Rental Housing Act", at California Apartment Association website. Accessed 2017-11-25.
- Cf. §1954.52(a)(1), (a)(2), (a)(3)(A).
- For vacancy control issues, see below under section "Effect of the Costa-Hawkins Act".
- Cf. 1954.52(a) and 1954.53(a).
- Cf. 1954.52(a)(3)(C) and 1954.53(a)(1) & 1954.53(b) & (c).
- Cf. 1954.52(b), 1954.53(a)(1)(B); & 1954.535, and 1954.53(f).
- Cf. 1954.53(b) & (d).
- Cf., Analyses: AB 1164, Assembly Floor 7/25/95 – DIGEST. California Legislative Information website. Note: 3-year phase-in (p.3,#2); housing programs repeal (p.2,#5, p.4,#7, p.6,#4).
- Cf. Civil Code, §1954.52.
- Civil Code, §1954.52(a)(1).
- Civil Code, §1954.52(a)(2).
- Cutler, Kim-Mai (Apr 14, 2014). "How Burrowing Owls Lead To Vomiting Anarchists (Or SF's Housing Crisis Explained)". TechCrunch. Archived from the original on 2014-04-30. Retrieved 2017-12-11.
San Francisco’s version of rent control also does not apply to buildings constructed after 1979,...
- Murphy, Katy (2018-01-11). "Rent control in California: Proposal to lift restrictions blocked in committee". San Jose Mercury News. Archived from the original on 2018-01-23. Retrieved 2018-01-28.
Single family homes and condominiums are exempt from rent control under this state law. So is any apartment built after 1995, when Costa Hawkins was passed, or in some cases much earlier. If a city adopted rent control in 1980, for example — as Oakland and Berkeley did — then that is the cutoff; nothing built afterward can be subject to rent control.
- Emily Alpart Reyes and David Zahniser, "Garcetti says he would consider expanding rent control in L.A.", in The Los Angeles Times, April 23, 2018. Accessed 2018-4-30.
- So that an apartment building in Los Angeles built in the 1980s and hence exempt as newly built under the City's 1978 rent control ordinance, would not lose its exemption because it was built before the 1995 Costa-Hawkins Act.
- Cutler, Kim-Mai (Apr 14, 2014). "How Burrowing Owls Lead To Vomiting Anarchists (Or SF's Housing Crisis Explained)". TechCrunch. Archived from the original on 2014-04-30. Retrieved 2017-12-11.
1) First off, understand the math of the region. San Francisco has a roughly thirty-five percent homeownership rate. Then 172,000 units of the city’s 376,940 housing units are under rent control. (That’s about 75 percent of the city’s rental stock.)
- Civil Code, § 1954.52 (exemptions).
- 2002 Amendment discussed in Burien case, pp. 5–9 & fns. 2 & 3, legislative history at pp. 7-8.
- Burien LCC v. Wiley (2009), at JUSTIA US Law. Accessed 2017-08-22.
- Cf., section below "Certificates of Occupancy: Burien LLC v. Wiley".
- Various other state laws impact rental housing, e.g., warranties of habitability, the building codes, rental agreements, unlawful detainer, et cetera.
- Dreier (1997), Part II, at section "Appendix: Arguments For and Against Rent Control". Discussion of the benefits of rent control as advanced by proponents and the author, and rejoinders to opposition arguments.
- Keating (1983), esp. at pp. 2–3 and 15–18, for additional proponent views. Keating centers on the preservation of affordable housing during a severe supply shortage, among other issues.
- Heskin (1983), for additional proponent views, and ideological perspectives. ""Tenancy excludes no group although certainly tenants are more likely to be young, female, minority, and low income in larger proportions than the population taken as a whole" (pp. 93–94).
- Jake Blumgart, "In Defense of Rent Control", at Pacific Standard, April 1, 2015. Accessed 2017-11-13. "The real goal of rent control is protecting the moral rights of... long-term tenants who... have a legitimate interest in staying in their apartments."
- Ben Bergman, "LA Rent: Has rent control been successful in Los Angeles?", at 89.3KPCC, Sept. 12, 2014. This article, while giving opponent views, is more favorable to proponents of rent control. Accessed 2017-008-22.
- Jeremy Rosenberg, "The fight against rent control", at KCET, March 4, 2013. Housing activist Denny Zane at ¶17: "The marketplace on its own does not produce affordable housing. It produces market rate housing."
- James Brasuell, "New Research changes the narrative on the effects of rent control", Planetizen, Oct. 22, 2018. Accessed 2018-11-1.
- Cf., Website of proponents of 'strict' rent control re California Proposition 10 (General Election, November 6, 2018): "Yes on Prop 10". Accessed 2018-11-1.
- "Title and Findings", quote at ∮ 37.1(b)(2) of The Rent Ordinance, at San Francisco Rent Board website.
- "Purpose", ∮13.76.030 of the Rent Stabilization and Eviction for Good Cause Ordinance, at Rent Stabilization Board, City of Berkeley website. Accessed 2017-11-13.
- "Statement of Purpose", Rent Control Charter Amendment, § 1800, at City of Santa Monica website. Accessed 2017-11-17.
- Analyses: AB 1164, Assembly Floor 7/25/95 – DIGEST, California Legislative Information website, quote at p.1.
- Birkenfeld v. City of Berkeley (1976), at Stanford Law School SCOCAL website. Accessed 2017-10-17. Here, while elements were found to be unconstitutional, the California Supreme Court held generally that "an emergency is no more necessary for rent control than for other forms of economic regulation which are constitutionally valid". Birkenfeld, opening paragraph.
- Keating in Niebanck (1985), pp. 66–67 (Birkenfeld case).
- Lenvin and Moskovitz , ∮7.10 (Birkenfeld case).
- Cf., Government Code, section 65589(b), at California Legislative Information website. Accessed 2017-10-19. California's requirement that cities enact a Housing Element does not grant nor repeal a city's authority regarding rent control.
- Cf., Keating (1983), p. 4: In the 1970s and early 1980s, the California courts found unconstitutional rent control ordinances or their elements in Berkeley, Cotati, Davis, and Palm Springs.
- Kavanau v. City of Santa Monica Rent Control Bd (1997), at Stanford Law School SCOCAL website. Accessed 2017-11-3.
- Berger Foundation v. City of Escondido (2005), at Find Law website. Accessed 2017-11-3.
- Cf., Lenvin and Moskovitz , ∮∮ 7.10 (Birkenfeld case and Fisher v. City of Berkeley), 7.13 (fair return: two Fisher cases), 7.14 (taking: Kavanau and Berger Foundation cases).
- See ordinances linked below, at "List of California Cities".
- "San Jose approves stricter rent control", at California Apartment Association website.
- Gregory Cornfield, "Beverly Hills extends emergency rent controls", in Park Labrea News/Beverly Press, Feb. 22, 2017. 2017-08-27.
- California Consumer Price Index (1955–2017). Accessed 2017-10-23.
- See below re such city ordinances linked to websites, at "List of California Cities". Au contraire, East Palo Alto, Palm Springs, Santa Monica, and West Hollywood use only a fraction of CPI.
- "Rent limitations", San Francisco Rent Board.
- "2014 adjustment", City of Berkeley Rent Stabilization Board.
- Brown, Portman, Rosenquest (2017), Appendix A at pp. 431–467: information about rent control in 18 California cities, described and compared in abstract.
- These types have also been excluded by some cities from rent control: duplexes, triplexes, four-unit apartment buildings (whether owner-occupied or not); luxury rentals (units with high rents), government subsidized units. Cf. Brown, Portman, Rosenquest (2017), p.89.
- "Topic No. 17, Overview of Covered and Excluded Units", at San Francisco Rent Board. Accessed Dec. 12, 2017.
- Thousand Oaks apparently excludes from rent control all apartment-house tenancies that began after 1987, the vast majority of such tenants. "Housing: Rent Control", City of Thousand Oaks. Accessed 2017-12-13.
- "Hearings, Mediations, and Appeals", at San Francisco Rent Board. Accessed 2017-08-24.
- Lenvin and Moskovitz , ∮∮ 7.41 to 7.52.
- Brown, Portman, Rosenquest (2017), pp. 90, 148 (mediation). Different are hearings before a rent control board, pp. 95–99.
- Minimal standards such as safety and health (e.g., functioning utilities, heat and plumbing, protection from weather) are set forth under California state habitability laws. E.g., California Civil Code, section 1941.1.
- Brown, Portman, Rosenquegst (2017), pp. 76, 195–196.
- "Maintenance of Rental Property", at Santa Monica Rent Control Board. Accessed Dec. 12, 2017.
- Bianca Barragan, "Los Angeles wants a registry of how much rent everyone is supposed to be paying", at Curbed Los Angeles, Feb. 17, 2016. Accessed 2017-08-23.
- Brown, Portman, Rosenquest (2017), pp. 89–90.
- Marcia Stewart, "Rent Control: Evictions in Rent Control Areas", at Nolo Press website.
- Ramona Giwargis, "San Jose City Council approves policy against no-cause evictions", The Mercury News, April 18, 22017. 2017-08-24.
- Costa–Hawkins leaves the cities free to regulate tenant evictions. Civil Code ∮1954.52(c).
- Civil Code ∮∮ 1946 and 1946.1.
- Lenvin and Moskovitz , ∮∮ 7.53 to 7.80; at ∮7.54 are described ten causes that may be considered "just cause" under the ordinances of various cities. ∮∮ 7.56 to 7.68 analysis examples of "just cause".
- Brown, Portman, Rosenquest (2017), pp. 92–95.
- "Tenant is at-fault for Eviction", at Los Angeles Housing and Community Investment Department. Accessed 2017-11-13.
- "SDCAA White Paper: City of San Diego Cause Eviction Ordinance", January 2015, at p.1, San Diego County Apartment Association website. Accessed 2017-12-12.
- Lenvin & Moskovitz (2017), ∮7.76A, payments to tenants, re relocation, e.g., San Francisco Residential Rent Stabilization and Arbitration Ordinance, ∮37.9C. Lenin & Moskovitz ∮7.65, p.7-110: relocation allowance to tenant if termination for move-in of owner's family.
- Brown, Portman, Rosenquest (2017), p.95
- "Relocation Assistance", City of Santa Monica Rent Control Board. Accessed 2017-08-24.
- "Relocation Assistance Information", at Los Angeles Housing and Community Investment Department. Accessed 2017-11-1.
- A mandated relocation allowance might be analogized to an unwilling landlord being forced to buyout a month-to-month tenant.
- Lenvin & Moskovitz (2017), Ellis Act: ∮ 7.64 to 7.64H. Relocation allowances by a city not preempted by Ellis Act per Government Code, ∮7060.1(c), at Find Law website.
- "Appeals Court strikes down San Francisco law on tenant relocation payments", at CBS SF Bay Area, March 22, 2017. Accessed 2017-08-24.
- Kaushik Basu and Patrick M. Emerson, "The Economics of Tenancy Rent Control", in The Economic Journal, v.110, pp.939–962 (2000). Accessed 2017-08-22. This article discusses laws without 'vacancy control', concluding at pp. 958–960 that their result is not Pareto optimal, and that they cause rents to rise.
- Jake Blumgart, "In Defense of Rent Control", at Pacific Standard, April 1, 2015. Accessed 2017-11-13. In 1992, 93% of the American Economic Association agreed that "a ceiling on rents reduces the quality and quantity of housing."
- Lisa Blackwell, "The high cost of rent control", at National Multifamily Housing Council website. Accessed 2017-11-7.
- For arguments taken by proponents of rent control, see section "Declared purposes".
- Jay Fitzgerald, "End of Rent Control in Cambridge", National Bureau of Economic Research. Accessed 2017-10-09. "[E]vidence indicates that ownership investments in rent-controlled units, including maintenance, upkeep and capital improvements, were lower than investments in non-controlled units" (¶5).
- Beacon Economics, "An Analysis of Rent Control in California" (Los Angeles 1916), for California Apartment Association.
- Keating (1983), pp. 14–15: Often the clear alternative to rent control, and best long-range cure for rents that are too-high, is more residential housing being built and coming on the market. Yet in a housing crisis when supply by free enterprise is failing to meet demand, government programs may not be sufficient either, e.g., Federal home finance, and rental programs such as section 8, and state mandates and subsidies for affordable housing. Keating (1983), p.1: Housing shortages are often due to surges in demand or insufficient supply. Low supply can be caused not only by a local government suppressing the business of rental housing providers, but also by laws restricting the real estate development of new rental units and/or underfunding of public housing.
- Gilderbloom in Niebanck (1985), pp. 76 & 137,n5. Housing supply is the heart of the tenant's problem. "Nationally known tenants' rights lawyers have spoken forcefully on the matter." Gilderbloom than quotes from Moskovitz, Warner, & Sherman, California Tenant's Handbook (1972), p.10: "The heart of the tenant's problem is not the laws and regulations (imperfect thought they may be), nor the goodness or badness of landlords (for they, like you, are but human)—no, the heart of the problem is with the supply of housing. It is drastically short."
- Keating (1985), p.70: "Even the most ardent advocates for rent control generally acknowledge that controls do not constitute a lasting or comprehensive solution to the rental housing problem. They agree on the need for substantial increases in the supply of affordable housing... ."
- Rebecca Diamond, Tim McQuade, Franklin Qian, "The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco", October 11, 2017, at National Bureau of Economic Research website, quote at p.44 (cf., p.43). Accessed 2017-11-9. Also known as the 'Stanford Study'.
- Adam Brinklow, "Stanford paper says rent control is driving up cost of housing in San Francisco", in Curbed San Francisco, Nov. 3, 2017. “These [effects] caused an aggregate welfare loss to renters of $5 Billion. This is almost as large as the benefits accrued by the lucky beneficiaries of rent control.” Accessed 2017-11-9.
- Katy Murphy, "Rent-Control Policy 'likely fueled the gentrification of San Francisco,' Study finds. As California debates rent caps, economists offer cautionary note", in The Mercury News, Nov. 2, 2017. Accessed 2018-1-13. Renters favored by the city's rent control saved $393 million, but rents overall increased $5 billion. Yet the alternative of subsidies would cost California tens of billion annually, as much as medicare. Murphy here reports on the Oct. 11, 2017 Stanford Study.
- Even proponents of rent control analyst it as a only second-best government solution to the housing crisis. The best use of scarce resources would apparently be to "directly subsidize renters with a dramatic expansion of Section 8 vouchers" thus making sure assistance flows only to residents who most need it. But the severe housing shortage and consequent high demand for rent relief by low-income residents make this best solution not politically appealing. Manuel Pastor, Vanessa Carter, & Maya Abood, "Rent Matters: What are the effects of rent stabilization measures", at USC Dornsife, October 2018, pp. 19-20; quote p. 19. Accessed 2018-11-1.
- Opponents to California's 2018 Proposition 10 believed the measure would make a bad housing crises worse. It would cause no new housing to be constructed and single family rental owners would remove their rentalsfrom the market. "No on Prop 10".
- "Learn about Cities", at California League of Cities website. Accessed 2017-10-09.
- Kevin McCallum, "Santa Rosa rent control beaten at ballot box" in The Press Democrat, June 6, 2017. Accessed 2017-08-22. The vote was 52.5% to repeal vs. 47.5%, with repeal forces out-spending the retain.
- Kevin McCallum, "Following rent control defeat, Santa Rosa City Council looks ahead", in The Press Democrat, June 7, 2017. Accessed 2017-10-25. A new focus is building affordable housing, including current subsidies, and exploring a bond.
- Steven Wishnia, "Seven California cities to vote on rent control", in Metropolitan Council on Housing, October, 2016. Accessed 2018-05-03.
- "List of Cities with Rent Control", at California Department of Consumer Affairs website. Accessed 2017-10-09.
- "Southern California Cities with Rent Control Regulations", at UpNest website. Accessed 2017-10-12.
- Cf., Brown, Portman, Rosenquest (2017), at p. 88 (list of nineteen, including four cities because of mediation services), at p. 431 (list of eighteen, dropping Palo Alto).
- See below, section "With non-rent elements".
- "Rent Review, Rent Stabilization and Limitations on Evictions", City of Alameda. Accessed 2017-10-12.
- City of Berkeley Rent Stabilization Board.
- City of Beverly Hills Rent Stabilization.
- "Rent Stabilization Program", City of East Palo Alto. Accessed 2017-10-12.
- "Residential Rent Stabilization Ordinance", City of Hayward. Accessed 2017-10-12.
- "RSO Overview", at Los Angeles Housing and Community Department. Accessed 2017-10-09.
- "Rental Dispute Resolution Regulations", Town of Los Gatos. Accessed 2017-10-12.
- "Rent Stabilization", City of Mountain View. Accessed 2017-10-12.
- "Welcome to the Rent Adjustment Program", City of Oakland website. Accessed 2017-10-09.
- "Rent Control", City of Palm Springs. Accessed 2017-10-12.
- "Richmond Rent Program", City of Richmond. Accessed 2017-10-12.
- Karina Ioffee, "Richmond: Judge rejects effort to halt rent control. Strikes down request for preliminary injunction and keeps law on the books", in East Bay Times, Feb. 15, 1017. Accessed 2017-10-12.
- "Rent Board", City of San Francisco. Accessed 2017-10-09.
- "Apartment Rent Ordinance", San Jose. Accessed 2017-10-12.
- "Overview: Rent Control Law and Regulations", at City of Santa Monica. Accessed 2017-10-09.
- Heskin (1985), pp. 63–65. The Santa Monica tenant movement became "a nationwide symbol" of political success in the late 1970s. At a meeting in Baltimore in 1980 they received from rent control advocates "a spontaneous and sustained standing ovation." Media coverage included the Wall Street Journal. Their local opponents coined the name "People's Republic of Santa Monica" (p.xv). From a "feeble" force in 1976, tenants had won elections that installed a tenant majority on the City Council, and a strict city rent control regime. Baltimore quote p.65.
- "Rent Stabilization", West Hollywood. Accessed 2017-10-12.
- See further below: subsections "With limited rent control" and "With non-rent elements".
- Cotati now has rent control for mobile homes, and special protections for children of renters, cf., "Housing", Cotati Municipal Code. Accessed 2017-10-12.
- Cf., 152 Valparaiso Associates v. City of Cotati, at Find Law website. Accessed 2017-10-12.
- Thousand Oaks has rent control for all mobile homes. "Housing: Rent Control", City of Thousand Oaks. Accessed 2017-12-13. The City apparently also controls the rent for the few apartment-house tenants whose tenancy began on or before 1987.
- "Housing: Campbell Rental Increase Dispute Resolution", City of Campbell. Accessed 2017-10-12. City "encourages" owners to limit rent.
- "Residential Rent Increase Dispute Resolution", at City of Fremont website. Accessed 2017-12-12.
- "Rent Mediation", City of Gardena. Accessed 2017-10-12. Gardena requires a 60-day notice for rent increases of 10% or more.
- "City of Palo Alto Tenant Guide". Accessed 2017-11-23. At p.8: "Is there rent control in Palo Alto? No." Palo Alto does mandate a non-binding mediation service (p.3) and offers counseling (p.4).
- "Rent Review Program", City of San Leandro. Accessed 2017-10-12. San Leandro requires a 60-day notice for rent increased of 10% or more. It encourages tenants to apply for its below market rate (BMR) rental housing units.
- Union City has a mandatory, non-binding mediation service, and bars no-cause evictions. "Rent Ordinances", Union City. Accessed 2017-10-12.
- See also the next section below ("refused").
- See the list of 'rent-controlled' cities in Brown, Portman, Rosenquest (2017), pp. 88 (included here, evidently only because of mediation: Campbell, Fremont, Gardena, Palo Alto); c.f., Appendix A, pp. 431–467 (abstract analysis of 'rent control laws' of eighteen cities).
- See also next section on cities refusing rent control.
- See next section ("refused").
- Brown, Portman, Rosenquest (2017), p.93 (list of cites with just cause required for evictions).
- "Just Cause Eviction Ordinance", at Glendale California website. Accessed Dec.10, 2017.
- "∮98.0730 Termination of Tenancy", at San Diego Municipal Code, Article 8: Housing. Accessed 2017-12-12.
- "SDCAA White Paper: City of San Diego Cause Eviction Ordinance", January 2015, at San Diego County Apartment Association website. Accessed 2017-12-12.
- Joseph Geha, "Union City: Council passes law barring tenant evictions without cause", East Bay Times, April 5, 2017. Accessed 2017-10-12.
- Joseph Geha, "Fremont isn't ready for rent control, council decides", East Bay Times, July 12, 2017. Accessed 2017-10-12.
- Arin Mikailian, "Rent control seems unlikely in Glendale but additional affordable housing may ease burden on renters", in The Los Angeles Times, Sept. 23, 2013. Accessed 2017-10-12.
- Allison Levitsky, "Council rejects study of rent control", in Daily Post, Oct. 18, 2017. Accessed 2017-11-23.
- Santa Rosa in 2017 repealed its rent control. For links to two press articles, see above at "List of California Cities".
- Cf., above "Opposition to rent control" for link per repeal by Cambridge, Massachusetts.
- Keating (1983), p.4 (quote; list & dates). Several of the 22 cities, however, later sdopted other versions: Berkeley, Oakland, San Francisco, Santa Monica.
- Keating (1985), p.60 (a list of cities avoiding rent control).
- Mike Madriaga, "You want rent control in San Diego? Sign here", in San Diego Reader, Aug. 28, 2017. Accessed 2017-10-12.
- Cf., Lenvin and Moskovitz , ∮∮ 7.4, 7.25 to 7.28A.
- Dreier (1997), Part II, at section "Consequences of Deregulation".
- Cf., Marcia Stewart, "Rent Control: Limits on Rent Control", at Nolo Press website.
- Analyses: AB 1164, Assembly Floor 7/25/95 – DIGEST, five cities with 'vacancy control' at p.2 and p.4. California Legislative Information website.
- Civil Code, section 1954.53(a): quote. Vacancy decontrol also applies to rental units where prior tenants are evicted for cause, e.g., for non-payment of rent, or for nuisance.
- "Vacancy Decontrol", Rent Stabilization Board, City of Berkeley. Accessed 2017-10-09.
- Cf., Meagan Messerly, "City struggles with vacancy decontrol", The Daily Californian. Accessed 2017-10-09.
- "California Civil Code, 1954.50–1954.535". Leginfo.legislature.ca.gov. Retrieved 11 July 2017.
- See above, "The Act's provisions as codified".
- For the "just and reasonable returns" standard, see above section "Constitutional limits".
- Levrin & Moskovitz (2017), ∮7.25: the Act per Civil Code ∮1954.53(e) "allows public entities to control the grounds for evictions from rent controlled properties."
- West's Cal Jur 3d, v.42, p.276: Costa Hawkins does not impair the authority of local government to monitor and regulate the grounds for an eviction. But it "cannot impose a procedural condition to an eviction" such as requiring a city permit (p. 279).
- Costa–Hawkins Act, Civil Code ∮1954.52: "(c) Nothing in this section shall be construed to affect the authority of a public entity that may otherwise exist to regulate or monitor the basis for eviction."
- Analyses: AB 1164, Assembly Floor 7/25/95 – DIGEST, at p.3,#4 (re requirement of 'just cause' for terminations). California Legislative Information website.
- "Does a Landlord need to give a reason for evicting a tenant?", The Los Angeles Times, Feb. 19, 2017. Accessed 2017-10-09.
- See above, section "Other elements".
- Keating in Niebanck (1965), pp. 59–61 (cities), pp. 64–65 (Los Angeles County).
- Palmer/Sixth Street Properties LP v. City of Los Angeles, at Google Scholar. Accessed 2017-10-25.
- Called Piero II, on Wilshire Blvd. adjacent to the 110 Fwy., cf. The Piero, at its commercial website. Accessed 2011-10-25.
- Lenvin & Moskovitz (2017), Palmer case at ∮7.25, p.7-45.
- Barclay & Gray (2014), Palmer case, pp. 434–435.
- "Court rules LA inclusionary housing mandate violates state law", in California Planning and Development Report [C P & D R], Aug. 20, 2009. 2017-08-28.
- Cf. "From the Field: California Supreme Court upholds inclusionary housing" (June 29, 2015), at National Low Income Housing Coalition website. 2017-08-28. The focus here is Calif. BIA v. City of San Jose (2015). The article at ¶6 distinguishes the 2009 Palmer case because it regards rentals rather that housing for sale as in Calif. BIA.
- Jeremy Rosenberg, "The fight against rent control", at KCET, March 4, 2013. Costa–Hawkins and Palmer case discussed at ¶¶ 6–16.
- Andrew L. Faber, Berliner Cohen, "Inclusionary Housing Requirements: Still Possible?" (California League of Cities 2014), at p.7: two quotes (misapplication, AB 1229).
- HansonBridgett, "Letter Brief" per Palmer case, pp. 5–6, 7–9, 10–12 (Sept. 9, 2009). Ac'd 2017-10-07. The law firm here makes the argument that the decision of the Court of Appeals was mistaken regarding the Palmer case, in that it did not follow established law. The legislative history of Costa–Hawkins is addressed.
- Andrew L. Faber, Berliner Cohen, "Inclusionary Housing Requirements: Still Possible?" (California League of Cities 2014), at p.7: two quotes (Brown's veto, the builder); at p. 9: The authors comment about Bay Area cities using money from "a straight fee to support affordable housing construction, instead of an in lieu fee... [T]he city can presumably work around the Palmer case by using the money for either for-sale or rental units, since Palmer would not apply to a city- subsidized project (or where the city is a lender and negotiates terms of the loan to include affordability)." Faber (2014) at p. 9.
- Barclay & Gray (2014) re rentals in inclusionary housing. Owner contracts with city re density bonus: for each affordable unit included, an extra market-rate unit (Barclay, pp. 439–440). Exceptions re Act ∮∮ 1954.52(b) and 1954.53(a)(2) (Barclay, p.435). Incentives and concessions to developers: zoning, taxes, fees, amenities, fast track, infrastructure (Barclay, p.439 text & n40).
- Nadia I. El Mallakhh, "Does the Costa Hawkins Act prohibit local inclusionary zoning programs?" at California Law Review, vol. 89, pg. 1849 (2001).
- "Update: Brown vetoes inclusionary zoning bill", Oct. 2, 2013, at California Apartment Association website. 2017-08-28.
- AB 1505 [text. The Palmer case is expressly named in Sec. 3(e), and in Sec. 3(i) the Costa Hawkins Act as codified is referenced.
- Cf. Support Letter of March 30, 2017, at California Housing Consortium, in favor of AB 1505 addressed to its Assembly sponsors Bloom, Chiu, and Gloria. This letter describes AB 1505 in favorable terms as the fix for the 2009 Palmer case, in that the bill restores to cities their prior discretion re inclusionary rental housing in new developments. In addition to the California Housing Consortium, supporters included California Rural Legal Assistance Foundation, Housing California, Non-Profit Housing Association of Northern California, and Western Center on Law and Poverty.
- AB 1505, Sec. 2 re feasibility studies and review by state.
- Liam Dillon, "Gov. Brown just signed 15 housing bills. Here's how they're supposed to help the affordability crisis", The Los Angeles Times, Sept. 29, 2017. Accessed 2018-09-15.
- Civil Code, §1954.52(a)(1).
- Burien case, at p.2 (quote), cf. pp. 7 & 8, and p.10. The rental was on Sawtelle Blvd. in Los Angeles.
- Burien LCC v. Wiley, at JUSTIA US Law. Accessed 2017-08-22.
- See section "2002 Amendment of the Act".
- Mosser Co. v. San Francisco Rent Stabilization and Arbitration Bd. (quote), at JUSTIA US Law. Accessed 2017-08-22.
- T & A Drolapas, and Sons, LP v. SF Residential Rent Stabilization and Arbitration Bd., at JUSTIA US Law. Accessed 2017-08-22. With the Board as respondent was named real party in interest Gerald Borjas.
- Marcia Stewart, "Rent Control: Evictions in Rent Control Areas", at Nolo Press website.
- Civil Code, sections 1954.52(a), and 1954.53(a).
- Mak v. City of Berkeley Rent Stabilization Bd., at JUSTIA US Law. Accessed 2017-08-22. Named with the Board as respondent was real party in interest: Alexander Ziem.
- Barclay & Gray (2014), p.409 (quote).
- "California's Housing Future. Challenges and Opportunities", January 2017 Draft, at California Department of Housing and Community Development website. Accessed 2017-11-21. At p.5: "From 2015–2025, approximately 1.8 million new housing units are needed to meet projected population and household growth, or 180,000 new homes annually." While 200,000 were produced in 2004 and 2005, in 2015 there were only 100,000 built.
- Alissa Anderson & Scott Graves, "Locked Out 2008", pp. 29–30, California Budget Project (Feb. 2008), at California Budget and Policy Center. Accessed 2017-11-15.
- Matt Levin, "California's Housing Shortage--It's even worse than you think", at KCET website, Aug. 23,2017. Accessed 2017-12-4.
- Cf., Editorial, "The Affordable Housing Crisis", in The New York Times, Dec. 4, 2012. Accessed 2017-11-15.
- Liam Dillon, "Little consensus over a shortage of homes. Experts and public disagree over housing crisis' roots, poll finds" in Los Angeles Times, Oct. 22, 2018. "Academic researchers, state analysts and California's gubernatorial candidates agree that the fundamental issue underlying the state's housing crisis is that there are not enough homes for everyone who wants to live here. The problem, a new poll finds, is that the public doesn't believe it." (p.B1).
- California Government Code § 65589.5 (quote), at California Legislative Information. Accessed 2017-11-15.
- "AB1515 Planning and Zoning: Housing" re HAA, at California Legislative Information. Click: 09-15-17 Assembly Floor Analysis by Rebecca Rabosky: p.1 at (2)(d) California has a housing deficit of two million units; p.1, (2)(e) California ranks 49 of 50 States in homeownership rates, and in supply of housing per capita; p.2, (2)(g) 1.5 million renters (almost a third) spend more that 50% of their income on rent.
- The HAA attributed the housing shortage to local governments who reject residential development projects. Govt. Code § 65589.5, at subsections (a)(2), (a)(4). Among operative provisions re local agencies: subsections (b) "not reject or make infeasible" qualified housing developments; (d) "not disapprove a housing development project... unless it makes written findings... ."; (i) "burden of proof".
- "Gov. Brown signs bill to help enforce pro-housing law", at California Apartment Association, Sept. 21, 1916. Accessed 2017-11-15.
- Tray Taylor, "Berkeley's bid to stop new housing being built overruled by judge", in Berkeleyside, July 25, 2017. Accessed 2017-11-16.
- Angela Hart, "How California's housing crisis happened", in The Sacramento Bee, Aug. 31, 2017. Accessed 2017-12-4.
- Cf., Lee E. Ohanian and Edward C. Prescott, "What in the Sam Hill are Cows doing on Sand Hill Road. They're eating the priciest grass in America, thanks to California's out-of-control land-use rules", in The Wall Street Journal, Dec. 1, 2017. Accessed 2017-12-2.
- "AB1515 Planning and Zoning: Housing" re HAA, at California Legislative Information. Click: 09-15-17 Assembly Floor Analysis by Rebecca Rabosky: p.2 at (3), & pp. 3–4: the three sponsors; p.3, HAA also called the "anti-NIMBY Act". Accessed 2017-11-18.
- Liam Dillon, "Senate bills aim to make homes more affordable, but they won't spur nearly enough construction", in The Los Angeles Times, Aug. 11, 2017. Accessed 2017-12-4. Discussed are two housing finance bills, and another bill to limit city regulation of new construction.
- Cf. subsection above re the 2017 fix re the Palmer case, per note discussing 15 new housing bills.
- "AB 1506", at California Legislative Information. Accessed 2-17-11-21. Chap. 2.7 contains only the entire Costa Hawkins Act. On Mar. 16, 2017, it was referred to the Assembly Committee on Housing and Community Development. No further action is reported.
- Andrew Khouri, "Largest effort to expand rent control in decades...", in The Los Angeles Times, April 6, 2017. Accessed 2-017-08-22.
- Angella Hart, "Are your housing costs sky high? A new fight over rent control is coming", in The Sacramento Bee, April 3, 2017. Accessed 2017-08-22.
- Andrew Khouri, "The largest effort to expand rent control in decades is on hold in Sacramento", in The Los Angeles Times, April 6, 2017. Accessed 2017-11-6.
- Angela Hart, "Battle over rent control in California expected to drag into next year", in The Sacramento Bee, April 24, 2017, updated July 13, 2017. Accessed 2017-11-21.
- Liam Dillon, "Proposal to expand rent control in California fails to advance", The Los Angeles Times, Jan. 11, 2018. Accessed 2018-1-13.
- Katy Murphy, "Rent Control in California: Proposal to lift restrictions blocked in committee", in The Mercury News, Jan. 11, 2018. Accessed 2018-1-13.
- "Initiative proposal Affordable Housing Act", at Initiative coordinator, Attorney General's Office, Oct. 23, 2017. Accessed 2017-11-21.
- Liam Dillon, "Rent control in California could expand dramatically under a possible 2018 initiative", in The Los Angeles Times, Oct. 23, 2017. Accessed 2017-11-21.
- Jenna Chandler, "Tenant groups, AIDS Foundation introduce initiative to repeal Costa Hawkins. It would allow Los Angeles to expand rent control laws", at Curbed Los Angeles, Oct. 23, 2017. Accessed 2017-11-21. LA Tenants Union supported the initiative.
- Adam Brinklow, "Ballot measure would expand rent control across California. Proposal wants to repeal 1995 Costa–Hawkins Act which prevents rent control in newly constructed buildings", in Curbed San Francisco, Oct. 25, 1995. Accessed 2011-11-9. According to Brinklow, ACCE suggested that “median rents are higher in California than any other state in the country.” Brinklow agrees that it’s true by many measures, but writes that Hawaii's is highest, where "the median price on a single bedroom home is $1,500/month, to California’s $1,410."
- Elijah Chiland, "Tenant groups say they have enough signatures for repeal of Costa Hawkins repeal measure", in Curbed Los Angeles, April 23, 2018. Accessed 2018-4-30. 565,000 signatures obtained, needed: 365,880.
- Emily Alpart Reyes and David Zahniser, "Garcetti says he would consider expanding rent control in L.A.", in The Los Angeles Times, April 23, 2018. Accessed 2018-4-30.
- "Qualified Statewide Ballot Measures". Secretary of State of California. 2018. Retrieved August 22, 2018.
- See above "Rent Control in California" for views of proponents of rent control in section "Declared purposes", and for views of its opponents in "Opposition".
- Liam Dillon, "California voters reject Prop. 10", Los Angeles Times, November 6, 2018. Accessed 2018-11-6.
- Murphy, Katy (2018-11-06). "California's rent-control measure defeated". San Jose Mercury News. Archived from the original on 2018-11-17. Retrieved 2018-11-25.
One factor that likely weighed heavily against Prop. 10 is the sheer number of property owners who rent out — or might one day consider renting — their single-family homes, which are currently exempt from rent caps, said Carol Galante, a former Obama administration housing official who now is professor of affordable housing and urban policy at UC Berkeley’s Terner Center for Housing Innovation. Nationally, Galante noted, 37 percent of the rental housing stock consists of single-family homes. “That puts lots of pressure on the situation,” she said. “You’ve got a large number of owners of that rental stock, and you have more people who would be concerned about price controls.”