Costa-Hawkins Rental Housing Act reform

From HousingWiki
California Assembly hearing for AB 1506 Costa Hawkins repeal

In 2017 two efforts launched to repeal the Costa-Hawkins Rental Housing Act ("Costa-Hawkins"), a California state law enacted in 1995 which places limits on municipal rent control ordinances. Costa-Hawkins a) excludes single-family homes including condos; b) excludes buildings built after 1995 or when a city's rent-control law passed; and c) prohibits vacancy control, i.e. it controlling the rent for a new tenant. 

In California, rent control laws are enacted by municipalities, and as of 2018 about 15 of the 482 have done so. 

See California housing legislation 2018 for all housing bills.

Costa Hawkins Act terms

Single-family homes exclusion

Prohibition of vacancy control

Exclusion of new buildings (after 1995 or when city rent-control law passed)


  • For the five cities with "vacancy control" the Act is phased-in.[39] 
  • It situates government contracts with owners about rent charged, and the effects of a notice of violation, e.g., about health or safety.[40] 
  • Costa-Hawkins also addresses subtenancies,[41] and other issues.[42]
  • 2002 amendment related to condominium conversion.
    It prevented owners of apartment buildings, who obtained a certificate for conversion, to avail themselves of the Act's exemption to rent control law, without actually selling any of such apartments as condominiums.[43]


AB 1506 bill to repeal Costa Hawkins

AB-1506 Residential rent control: Costa-Hawkins Rental Housing Act is a bill introduced in the California State Legislature in 2017 to repeal the 1995 Costa-Hawkins Rental Housing Act which places limits on municipal rent control ordinances.

Lead Authors: Bloom (Assemblymember, D-Santa Monica) , Rob Bonta (Assemblymember, D-Alameda) , David Chiu (Assemblymember, D-San Francisco)

In the key Jan 11 Hearing at Housing and Community Development Commitee, it failed to receive the necessary majority vote to be passed out of committee. 

Marc Steinorth @MarcSteinorth ‏(R-San Bernardino) - NO
Jim Wood @JimWoodAD2 (D-Healdsburg) - ABSTAIN
Ed Chau @AsmEdChau (D-East LA) - ABSTAIN
Steven S. Choi @DrStevenChoi (R-Irvine) - NO
David Chiu @DavidChiu (chair, San Francisco) - YES
Mark Stone @AsmMarkStone - YES
Rob Bonta @RobBonta (D-Oakland / East Bay) - YES

(Stone & Bonta were at hearing in place of absent committee members Todd Gloria @ToddGloria, Monique Limon @AsmMoniqueLimon) 

Dillon, Liam. “Proposal to expand rent control in California fails to advance.” LA Times, 11 January 2018. 

2018 ballot initiative to repeal Costa-Hawkins

The California Local Rent Control Initiative (original title, Affordable Housing Act) is a 2018 California ballot initiative to repeal the 1995 Costa-Hawkins Rental Housing Act which places limits on municipal rent control ordinances. It was filed on filed 23 October 2017 by Michael Weinstein, Elena Popp, and Christina Livington. 

A similar measure was proposed as legislative bill AB 1506, filed in 2017, but this failed to pass out of the housing committee in a vote on 11 January 2018. 

Text of Initiative (from Ballotpedia). 



Michael Weinstein 

co-signer of filing letter. Director of AIDS Healthcare Foundation, Los Angeles.  (@AIDSHealthcare)

Elena Popp

co-signer of filing letter. 

Christina Livington

co-signer of filing letter. 

Alliance of Californians for Community Empowerment

"The Alliance of Californians for Community Empowerment (ACCE) Action is a grassroots, member-led, statewide community organization working with more than 10,000 members across California. ACCE is dedicated to raising the voices of everyday Californians, neighborhood by neighborhood, to fight for the policies and programs we need to improve our communities and create a brighter future."  @CalOrganize

LA Voice

Damien Goodmon / Housing Is A Human Right project (AIDS Healthcare Foundation)




California Apartment Association 

California Association of Realtors


Related statements opposing full Costa-Hawkin repeal

North Bay Assemblyman Jim Wood on why he declined to vote AB1506 repeal bill out of Housing committee:
"I am not confident that a complete repeal of #CostaHawkins is the answer. I’m concerned that this bill does nothing to facilitate an increase in the supply of housing..."  via @KQEDnews


Issues / Concerns

General arguments for and against rent control

see: Wikipedia, "Rent control in the United States"

"The rental-accommodation market suffers from information asymmetries and high transaction costs. Typically, a landlord has more information about a home than a prospective tenant can reasonably detect. Moreover, once the tenant has moved in, the costs of moving again are very high. Unscrupulous landlords could conceal defects and, if the tenant complains, threaten to raise the rent at the end of the lease. With rent control, tenants can request that hidden defects, if they exist, be repaired to comply with building code requirements, without fearing retaliatory rent increases. Rent control could thus compensate somewhat for inefficiencies of the housing market."

By limiting the extent to which landlords can raise rent on purportedly depreciated property, rent control restores balance to tax benefits otherwise received primarily by homeowners and landlords.

Rent control may reduce instability and associated external costs

"Rent stabilization (for a current tenant) may be considered a basic form of consumer protection: once tenants move into a vacant unit at market rents they can afford and establish lives in these homes, they won't have to renegotiate. Without rent regulation, landlords can demand any amount and tenants must either pay or move. Thus, tenants can become vulnerable to arbitrary and extortionate increases above market value."

The Socialist International argues that housing is a positive human right[34] that equals or exceeds the property rights of landlords.


Expanding rent control could disincent creation of new rental housing

[LAO 2016]:
"The state’s shortage of housing also presents challenges for expanding rent control policies. Proposals to expand rent control often focus on two broad changes: (1) expanding the number of housing units covered—by applying controls to newer properties or enacting controls in locations that currently lack them—and (2) prohibiting landlords from resetting rents to market rates for new tenants. Neither of these changes would increase the supply of housing and, in fact, likely would discourage new construction."

also [NAR 2018].


Rent control encourages conversation of rental units to owned units (e.g. apartment to condos)

Kenneth Stahl‏ @kookie13 12:20 PM - 11 Jan 2018
what's the point of repealing C-H if landlords can just convert to condos?
Don't we need to amend the Ellis Act to limit condo conversion before repealing C-H?

also [CAR 2018]. 


Rent control encourages leaving apartments vacant

[CAR 2018]


Rent control doesn't necessarily serve lower-income households

"Requiring landlords to charge new tenants below–market rents would not eliminate this competition. Households would have to compete based on factors other than how much they are willing to pay. Landlords might decide between tenants based on their income, creditworthiness, or socioeconomic status, likely to the benefit of more affluent renters." 
- [LAO 2016]. 

'Lock-in effect': rent control incents people to stay in a home longer than they otherwise would

"Households residing in affordable housing (built via subsidized construction or inclusionary housing) or rent–controlled housing typically pay rents well below market rates. Because of this, households may be discouraged from moving from their existing unit to market–rate housing even when it may otherwise benefit them—for example, if the market–rate housing would be closer to a new job. This lock–in effect can cause households to stay longer in a particular location than is otherwise optimal for them."
- [LAO 2016].

Rent control can disincent maintainance, repairs, and renovation

"Declining Quality of Housing. By depressing rents, rent control policies reduce the income received by owners of rental housing. In response, property owners may attempt to cut back their operating costs by forgoing maintenance and repairs. Over time, this can result in a decline in the overall quality of a community’s housing stock."

Costa Hawkins repeal could provide NIMBYs a New Tool to block housing

[CAR 2018]



Should these rent-control aspects be determined by the state or local governments?


Problems with using intiative process

Assemblymember Richard Bloom (D-Santa Monica), sponsor of AB1506 repeal bill: 

“At the same time, while I understand why some want to put this change on the ballot, it is never ideal to address a complicated issue like this through the initiative process,” Bloom said.  “First and foremost, the initiative process is a simple up or down vote that does not allow for any public input, shuts down dialogue amongst stakeholders, and prevents anyone from making changes to address any concerns raised by those impacted by the proposal. “Secondly, if there are unintended consequences down the road that need to be fixed, it will require a 2/3 vote of each house of the Legislature – a threshold not easily achieved.  For these reasons, something this complicated is better left to the legislative process. AB 1506 remains a vehicle for responsible dialogue and, I hope, legislation that will ease the economic burden that is affecting so many Californians.”
 - quoted in 



Proposals for revisions and alternative reforms 

Rolling rent control 

(make rent control apply to buildings only after a certain time - 10, 20, 30 years.)

East Bay For Everyone: 
"we support a rolling phase in period for rent control of, for example, 10 years after the issuance of an occupancy permit, so that rent control does not render new homebuilding economically infeasible." 
In support letter for AB1506.  See [East Bay for Everyone, 2017].

“providing a rolling definition of what ‘new construction’ is.”  - Rob Bonta, at Jan 11 2018 hearing. 

@housingforLA supports. 

alon_levy‏ @alon_levy 2:02 PM - 11 Jan 2018
Replying to @IDoTheThinking
"Alternative: tie SB 827 with a statewide ban on rent control. All of today's RC units become market-rate at an integer # of tenancy years."


Belmont Renters‏ @BelmontRenters 3:54 PM - 11 Jan 2018
Replying to @MarcSteinorth
"What about rent control on buildings that are 20 years old? Payback period for new construction is rarely longer than 10 years."

matthewplan‏ @matthewplan 1:10 AM - 12 Jan 2018
Replying to @weel @VamonosLA
"The argument is let different cities make their own policies and not let Costa Hawkins tie hands. Though there likely should be some year limit - 25 years after construction - to ensure new construction isn’t impacted."


Means-tested rent control 

Paavo Monkkonen‏ @elpaavo 10:34 AM - 11 Jan 2018
"also, why don't people talk means-tested rent control. obvs more complex but would remove key argument against"

Henry Fung‏ @calwatch 10:39 AM - 11 Jan 2018
Replying to @elpaavo
"Would discourage rentals to poor, create cliff effects, etc. If you wanted this, then broaden rent subsidies and fund it with general taxation."

Shane Phillips‏ @shanedphillips 11:07 AM - 11 Jan 2018
Replying to @elpaavo
"One big challenge would be landlords -- seems like it'd give VERY strong incentive to avoid lower income people, since the savings to renters come out of the owners' pockets."

Pedro‏ @peterpedroson 12:08 PM - 11 Jan 2018
Replying to @elpaavo
"I think means testing would remove the middle class as a constituency for maintaining RC"

Combine rent control and upzoning

YIMBYwiki @YIMBYwiki 5:19 PM - 10 Jan 2018
Replying to @ebarcuzzi @MattRegan10 and 2 others
"@TommSciortino another possible angle is to bundle/trade  #CostaHawkins reform with major housing-creation support like #SB827"

Victoria Fierce, legal anarchist‏ @tdfischer_ 9:31 AM - 11 Jan 2018
"CAA witness says developers are afraid of uncertainty with AB 1506... May I suggest tying this to SB827 as a grand bargain.

Paavo Monkkonen @elpaavo 9:44 AM - 11 Jan 2018
instead of arguing about which approach is better, do both!

Paavo Monkkonen @elpaavo
I meant upzoning + rent control, both would be free! and one would even generate $$$

Dragonfly on Deck @IDoTheThinking 1:25 PM - 11 Jan 2018
"Tie the #RepealCostaHawkins bill with SB 827 so that they can work off each other. Subsequent votes."

this socialist blocks parvenus @TribTowerViews 1:33 PM - 11 Jan 2018
Replying to @IDoTheThinking
"Amend SB827 to add relocation payments, right of return and prevailing wage.
Amend CH to allow RC on existing units and new construction after (x) years."

Brian Hanlon  @hanlonbt 1:47 PM - 11 Jan 2018 
Replying to @TribTowerViews @IDoTheThinking
"SB 827 is going to be hard enough to pass as it is. Tenant advocates couldn't even get Costa Hawkins reform out of the policy committee chaired by its coauthor. SB 827 dies if we pair CH reform with it."

Victoria Fierce, legal anarchist‏  @tdfischer_ 1:59 PM - 11 Jan 2018
Replying to @hanlonbt @cjg2127 and 2 others
"This yimby also would love nothing more than pair CH with SB827 in a way that addresses all of the concerns about housing supply brought up in committee today such that everything passes and the fauxgressives get peeled off of the leftist/nimby nightmare coalition."

Dragonfly on Deck‏  @IDoTheThinking 2:32 PM - 11 Jan 2018
Replying to @tdfischer_ @hanlonbt and 2 others
"Pair them only in the sense that they both are voted on within close timeframes. It wouldnt be wise to actually couple those bills into 1 legislation. Right wing Homeowner associations are stronger than crazy peeps with blogs."

Housing For LA  @housingforla 12:53 PM - 11 Jan 2018 
More Housing For LA  Retweeted Matt Levin
"California Apartment Association doing exactly what I wrote in my article yesterday (open to negotiating on 1995 provision). There is a grand bargain package out there. Californians will figure it out together."

Matt Levin @mlevinreports 12:53 PM - 11 Jan 2018
"Bloom making point that after committee vote you can still change bill in debate. CAA says it may be open to negotiating on 1995 provision."

alon_levy‏ @alon_levy 2:02 PM - 11 Jan 2018
Replying to @IDoTheThinking
"Alternative: tie SB 827 with a statewide ban on rent control. All of today's RC units become market-rate at an integer # of tenancy years."


Exclude single-family homes

JFK→NRT→SIN→IAD→NRT→BOS→JFK→OAK→JFK‏  @Maxtropolitan 2:30 PM - 11 Jan 2018
Replying to @sporc_ca @TribTowerViews and 3 others
"What makes the total repeal hard, statewide, is that he didn't include an individual homeowner exemption, and that homeowners vote more often than renters do. 
If there was an individual homeowner exemption, it'd win easily."


Guillotines for property owners

from Jacob Woocher‏  @jacobwooch 3:41 PM - 11 Jan 2018





See Also



Twitter tracker link: (search for: #AB1506 OR #CostaHawkins OR #RepealCostaHawkins OR “Costa Hawkins”)