A closely watched attempt to repeal a California law restricting rent control died at a packed committee hearing Thursday, but proponents vow to keep fighting — and, if they get nowhere in the Capitol, to take the issue straight to voters.
“I think there is no choice but for the conversation to continue and for us to try to find common ground,” said a disappointed Assemblyman Richard Bloom, D-Santa Monica, the main author of Assembly Bill 1506.
The raucous hearing attended by landlords and tenants underscored the deepening tension in the state as the housing crisis shuts out many from buying a home and forces residents to pay rising rents that outpace their incomes.
At issue is a state law known as Costa Hawkins that prohibits cities from imposing rent control on condominiums, single-family homes, or apartments built after 1995 — and in some cases, much earlier. If a city first enacted rent control in 1980, for example, any units built afterward are exempt. The law also prohibits cities from requiring landlords to limit rent increases after a renter moves out, a practice known as vacancy control.
Legislation to repeal the law was batted down so quickly by opponents last year that it didn’t get a single hearing. Bloom revived the bill this year as the rental crisis deepened and a tenants’ rights coalition began gathering signatures for a ballot initiative to expand the number of dwellings that could be subject to rent control.
But Thursday’s vote underscored how polarizing the issue is, even among Democratic lawmakers. The Assembly Housing and Community Development Committee voted 3-2 on the proposal, with Democrats Ed Chau, of Monterey Park, and Assemblyman Jim Wood, of Healdsburg, abstaining. The two Democrats and the committee’s two Republican members who voted against it said they feared it would curb the availability of rental homes.
Landlords cheered the decision while rent-control advocates organized by the Alliance of Californians for Community Empowerment, co-sponsors of the proposed ballot initiative, took over the hearing room, unfurling banners and chanting, “No housing, no peace!”
“We plan to do everything in our power to fully repeal Costa Hawkins — whether that’s moving it through the legislature or this year at the ballot,” Deepa Varma, of the San Francisco Tenants Union, said in a statement after the decision, adding that proponents of the bill were “extremely outraged” over the decision.
For about four hours, many hundreds — and possibly over 1,000 — supporters and opponents filled the hearing room and packed the long hallway outside. Some of the activists in the hall outside found a way to make their voices heard, chanting, cheering and occasionally pounding on the walls.
Supporters argued that tenants need some measure of security as sharp rent increases continue to sweep across California. In San Jose, the median monthly rent for a two-bedroom apartment is now $2,550, far above the national average of $1,560. A similar two-bedroom flat goes for $3,080 in Walnut Creek, according to a recent report from ApartmentList.com.
But opponents, including representatives from the California Apartment Association and the California Association of Realtors, argued such a move would make the state’s housing shortage worse. If California repeals Costa Hawkins and cities adopt more sweeping measures, argued the apartment association’s Debra Carlton, “When my kids get out of college they won’t find a place to live.”
Billy Martin, an in-home care aide from Oakland, says broader rent control ordinances are desperately needed for families like his who are “a stone’s throw away” from eviction. He said he returned home from work last year to the two-bedroom apartment in East Oakland that he rents with his wife and children to find a notice on the door from the new owner, an investor: His $800 monthly rent, it said, would jump to $1,500. He tried to fight it, but without rent control, he had little recourse.
The investor who owns his apartment, he said, also rents hundreds of other properties. “Do you know how many lives he has in his hands?” Martin asked.
There may be some bad actors, said San Francisco landlords Irene Lo and her husband, Robert Bailey, but it’s not fair to paint all landlords as evil and greedy. Opening the door to more extensive rent-control measures would be incredibly onerous for small landlords like them, they argued, making it difficult to make needed repairs.
“Why would we want to open up our unit for rent?” Lo asked.
Rent control is also unpopular among economists, who say it distorts the market and dampens supply. A study released late last year by Stanford economists found that San Francisco’s rent control policy fueled gentrification by leading landlords to leave the rental market, resulting in a smaller supply of affordable rental housing. They argue that the state should find another way to provide cost stability to renters without forcing landlords to absorb all of the cost.
Few expected a full repeal to pass the state Legislature, but in an interview this week, Bloom said he was hopeful that the prospect of a ballot initiative would lead to a compromise. Bloom and other lawmakers did not immediately say what they would do next.
“I’ve always tried to open the door to conversations about compromise,” he said before the vote. “Up to this point, we haven’t seen a lot of movement in that direction.”
COSTA HAWKINS, EXPLAINED
What is Costa Hawkins? It’s a decades-old California law that makes it illegal for cities to adopt certain kinds of rent control ordinances. There is a big push by renters’ groups and some state lawmakers to repeal it, lifting the restrictions.
What are the restrictions? Single family homes and condominiums are exempt from rent control under this state law. So is any apartment built after 1995, when Costa Hawkins was passed, or in some cases much earlier. If a city adopted rent control in 1980, for example — as Oakland and Berkeley did — then that is the cutoff; nothing built afterward can be subject to rent control. Costa Hawkins also prohibits cities from having a say in how much a landlord can raise the price after a tenant moves out, a policy known as vacancy control.
How many cities in California have some form of rent control? At least 15, according to the Department of Consumer Affairs, including Berkeley, Beverly Hills, Campbell, East Palo Alto, Fremont, Hayward, Los Angeles, Los Gatos, Oakland, Palm Springs, San Francisco, San Jose, Santa Monica, Thousand Oaks, and West Hollywood.