In 1995 the legislator passed the Costa-Hawkins Rental Housing Act (Costa-Hawkins), which limits local rent control laws in three main ways. First, rent control cannot apply to any single-family homes. Second, rent control cannot apply to any housing built on or after February 1, 1995. Third, rent control laws generally cannot tell landlords what they can charge a new renter when first moving in. Instead, rent control can only limit how much landlords increase rent for existing renters.
Proposition 33 will eliminate Costa-Hawkins and instead give local governments free reign to regulate rent control. If passed, Prop 33 would allow cities and counties to:
- Implement rent control on ALL rental units, including single-family homes and vacant units.
- Limit the amount that landlords can raise rents each year, including for new tenants.
Proponents of Prop 33 argue that it is necessary to protect tenants from rising rents. They say that deregulated rent control is an effective way to make housing more affordable and stable for low- and middle-income Californians.
Opponents of Prop 33 argue that it would discourage private investment in long term rental housing, leading to an increase in short term rentals, and a shortage of affordable long term rental units. They also say that it would make it more difficult for individual landlords to maintain their properties, forcing mom and pop landlords to sell to corporate investors.
Potential negative consequences for landlords:
If Prop 33 is passed, it could have several negative consequences for landlords, including:
- Reduced rental income: Landlords would be limited in the amount they could raise rents each year. This could lead to a significant reduction in their rental income, especially in areas with high housing costs.
- Increased vacancy rates: Rent control could discourage landlords from renting out their units, leading to an increase in vacancy rates. This could make it more difficult for tenants to find affordable housing.
- Decreased property values: The value of rental properties could decline if Prop 33 is passed. This is because landlords would be unable to raise rents as much as they would otherwise be able to, and in turn would be unable to maintain their properties.
- Additional local government fees: Expanding local rent control could get expensive for local governments, possibly costing millions each year. Landlords would likely be on the hook to cover those costs through new fees.
Overall, Prop 33 would have a significant negative impact on both landlords and tenants. It is important for everyone to be aware of the potential consequences of this proposition before voting.
