With the cost of rents in many cities in California at all-time highs, there are efforts to have a ballot initiative and to implement some form of rent control in some cities. Whether you are a real estate investor, a homeowner, or a renter, these ballot initiatives will have a major impact on housing if passed.
On the state level, supporters claim that they have gathered enough signatures to have a ballot initiative placed on the November ballot that would repeal the 1996 Costa-Hawkins Act. If you are unfamiliar with this act, it sets limits on the kind of rent control that cities can impose on landowners. The law makes it illegal for cities to apply rent caps to properties built after 1995 or when the city rent control was passed.
The main rent control law is called the Rent Stabilization Ordinance. It was passed in 1979 and restricts rent control to units built prior to October 1978, a date frozen in place because of the Costa-Hawkins Act.
The Costa-Hawkins Act also bars cities from passing rent control on rented condominiums and single-family homes. Additionally, it prohibits cities from regulating how much a landlord can raise the rent after a tenant moves out.
The initiative that we expect will be on the November ballot would repeal Costa-Hawkins. At least 15 California cities have rent control policies in place right now. In the LA area, they include West Hollywood, Beverly Hills, Thousand Oaks, Santa Monica, and the city of Los Angeles.
In addition, there are efforts underway to have some form of rent control on the ballot in Long Beach, Inglewood, and Pasadena. In Long Beach, the proposed ballot measure would cap rent hikes for most apartments built before 1995 at 5% or lower. It would also establish a city-wide rental housing board, which would be funded through fees charged to landlords.
If you would like more information on these ballot initiatives and how it might impact you, please feel free to reach out and give us a call or send us an email. We would love to hear from you soon.