California statewide rent-control rules have essentially been frozen in amber for three decades. The Costa-Hawkins Act, named after the Democratic and Republican lawmakers who sponsored it, prohibits local governments from putting rent control on homes built after Feb. 1, 1995.
The law allows property owners to charge whatever they want when a previously rent-controlled unit comes back on the market but limits how fast the rent can rise over time when a new tenant moves in.
If California voters approve Proposition 33 in November, Costa-Hawkins would be repealed. This would not immediately implement rent control across the state, but it would hand power back to local jurisdictions to regulate rents if they choose to.
Voters have been inundated with conflicting messages regarding the measure. Some ads claim the state’s “affordable housing laws” would get slashed, while others claim the new law would lower housing costs.
The reality is more complicated. Proponents of rent control say the policy makes housing affordable for tenants and prevents displacement, while opponents say it interferes with the normal functioning of the housing marketplace and makes new housing more difficult to finance and build. Both are true to an extent.
In San Francisco, Costa-Hawkins restrictions are backdated to 1979, when the city enacted its last rent-control measure. But the Board of Supervisors recently passed an expansion that would move that cutoff date to 1994, if Prop. 33 passes. Furthermore, Mayor London Breed said she would sign the expansion into law if Californians approve the measure.
“As a lifelong renter, I know the importance rent control plays in keeping people stably housed in our city,” Breed said in a statement. “I believe this legislation strikes that balance.”
Meanwhile, even pro-housing advocates like Shane Phillips, a housing researcher at the UCLA Lewis Center for Regional Policy Studies, have argued against the measure. He said that while expanding rent control would benefit some residents, it could have a chilling effect on new housing development if rolled out improperly.
In the city of Huntington Beach, for example, Republican Councilmember Tony Strickland supports Prop. 33 because it would give local governments “ironclad protections from the state’s housing policy and therefore overreaching enforcement.”
Phillips argued that local governments with similar opinions can mandate that all new rental housing be rent-controlled, effectively making them a no-go zone for developers.
The measure is authored by the controversial AIDS Healthcare Foundation, which has been criticized for its handling of its own portfolio of apartment buildings in Los Angeles, where an investigation last year found more than 1,300 residents lived in squalid conditions and threat of eviction.
This is the third attempt to remove statewide limits on rent control sponsored by the nonprofit on the ballot since 2017. The two previous attempts failed.
Prop. 34, a separate ballot measure funded by the California Apartment Association — an interest group made up of landlords — is meant in part to neuter the AIDS Healthcare Foundation’s ability to put further rent control measures on the ballot.