Update: Repeal of Costa Hawkins Act

The Costa Hawkins Act has been in debate for many years. With rising rents and strong demand for housing in Los Angeles, tenants have begun to rally for their rights. These past few months have seen extraordinary rallying from pro-tenant groups to repeal the Costa Hawkins act.

As of Monday April 23rd, Los Angeles tenant advocates have announced that they have gathered enough signatures for the November ballot initiative to repeal California’s Costa Hawkins Rental Housing Act. Supporters of the repeal gathered in Downtown Los Angeles to petition the exponential rise in rents.

This will affect all rent controlled exempt buildings such as properties built after October 1978 and single family rentals. In addition, if repealed, landlords will no longer be able to re-list rent controlled units at market rate prices after tenants move out.

This is the second time pro-tenant groups have tried to make a pass at repealing the Costa Hawkins Act. In fact, the group has failed from earlier this year to repeal Costa Hawkins in the state legislature. However, the repeal failed by only one vote.

The support for rent control did not come as a surprise. Rental evictions have increased in numbers in the last few years. According to Princeton University, approximately 3,255 renters in the city of Los Angeles were evicted from their homes in 2016 and the numbers have been rising ever since. Although small in comparison to other cities, this number does not account for other means of removing tenants such as raising the rent or simply paying renters to leave through cash-for-keys program.

The explosion of gentrification in Los Angeles, has added to the increase of homelessness. In fact, according to the 2017 Los Angeles Homeless Services Authority report, 600,000 people in Los Angeles are considered “severely rent burdened” and more than 8,000 people became homeless for the first time last year.

This has fueled pro-tenant movement throughout Los Angeles to push for tighter rent control restrictions. Although a complete repeal of Costa Hawkins act seems unlikely, no one really knows what will happen to rent control regulations in Los Angeles. Some possibilities include pushing the date for rent-controlled buildings forward 20 years to 1999 instead of 1978 or the year could change on a 15 years rolling basis.

One thing is for sure, rent control is changing in Los Angeles and landlords should expect to see some changes in the near future. To stay updated on the latest rent control news, sign up for our emailing list. As always if you’re interested in buying or selling a multifamily property, please email me or call me at 818-915-9118.