Rent control has been called both a magic bullet in the fight against California homelessness, and a red herring that will make development impossible. The Costa-Hawkins Rental Housing Act in 1995 prohibited local governments from creating their own rent control laws on new single-family homes and apartment buildings, but that could soon be a thing of the past.
Assembly Bill 1506, authored by Assembly Member Richard Bloom (D-Santa Monica), would repeal Costa-Hawkins and enable local governments to control rent on new buildings for the first time since 1995.
The bill had its first hearing on Jan. 11, when it failed to pass the Assembly Housing Committee. It needed a majority of the committee to vote in favor, but only three did so. Two voted against, while two chose to abstain. But Damien Goodmon, director at Housing is a Human Right, proponents have one last option. The Attorney General of California gave supporters of AB 1506 the go-ahead to collect signatures for a ballot initiative that will repeal Costa-Hawkins on Dec. 27.
Supporters have until June 25 to produce valid signatures from 365,880 registered voters to qualify the measure for the November ballot, according to Secretary of State Alex Padilla.
Goodmon, who works closely with the AIDS Healthcare Foundation, the Eviction Defense Network and other supporters of AB 1506, says that the Costa-Hawkins Act prohibiting rent control, is a major factor in California’s infamously high rental prices.
He also said there’s more at stake here than just rent control. AB 1506 would also enable cities to pass vacancy control laws. When properties become vacant, landlords can raise rent for new vacants with impunity, which in turn drives the homelessness epidemic across California, as new renters can’t afford new vacancies.
“Every member of the working poor has a target on their back,” Goodmon said.
But state analysts said there’s even bigger ramifications for tax revenue. According to the Legislative Analyst’s Office and Department of Finance, a net revenue decrease is more likely than a net increase. AB 1506 would also increase local government costs of up to tens of millions of dollars per year in the long term, costs that would fall on the shoulders of property owners, according to the analysis.
Supporters of the bill say that only AB 1506, or something like it, could help tenants across California combat high rent.
“Our Democratic leaders have long said that they want to do something about the affordable housing crisis,” Goodmon said. “Well, here’s something!”