Tuesday, April 7, 2015

Time to Overhaul Costa Hawkins

by Dean Preston, Tenants Together Executive Director

Residents of 901 Jefferson Street in Oakland are protesting increases ranging as high as 120% from their new, multi-billion dollar corporate landlord.  In Daly City, Oscar Moreira is facing a 41% increase.  In San Francisco, Debra Follingstad just received a notice from her landlord that her rent in San Francisco will increase 400%.  In Redwood City, Martha Ortega got hit with a 125% rent increase.  Across the Bay Area, rent increases in the double and triple digits are increasingly common.

If there was ever a time for widespread adoption of new rent control ordinances, the time is now.  As rents soar, many cities are considering adopting new rent control ordinances.  Richmond, Alameda, Burlingame, and Redwood City are among those where advocates are speaking out for rent control.  Rent control is essential in these cities as tenants face rent increases exponentially greater than any rise in landlord operating costs.

Even with local rent control laws, however, many tenants will continue receiving huge rent increases thanks to the outdated Costa Hawkins Rental Housing Act, a state law adopted in 1995 that is in desperate need of an overhaul. In a timely piece in the East Bay Express recently, Robert Gammon noted:
Rents, in short, are officially out of control. And the skyrocketing prices are making apartments much too expensive for many longtime residents. Unfortunately, however, the city can't do much about it. Why? A twenty-year-old state law known as the Costa-Hawkins Rental Housing Act blocks Oakland and other California cities from adopting sensible rent control rules that could help keep rent prices from getting even higher.  Costa-Hawkins, which doesn't get nearly enough attention from the news media, prohibits Oakland from establishing rent control on buildings constructed after 1983. That means that about one-third of all rental units in Oakland — 32,000 out of 92,000 — are exempt from the city's rent control regulations.
-East Bay Express, “It’s Time to Overturn the State Ban on Rent Control” (Robert Gammon, March 25, 2015.)

Costa Hawkins deprives cities the most effective tool they would otherwise have to reign in rent-gouging landlords: strong rent control.  Costa Hawkins ties the hands of cities, barring them from applying rent control to certain kinds of housing – including condos, single family homes, and units built after 1995 -- and barring cities from regulating rent at the time tenants move in.  Costa Hawkins also bars cities from moving their exemption date, so cities that had exemptions for new construction in their local laws when Costa Hawkins passed are stuck with those cutoffs.  That’s why, as Gammon notes, Oakland cannot apply rent control to anything built after 1983.  Cities are also blocked from applying rent control to the single family homes that are increasingly being bought up and rented out by Wall Street investors.

A growing number of tenants in California live in units that are exempt from rent control under state law.  Tenants in those units need protection from exorbitant rent increases.  Such rent increases contribute nothing to local economies and drive tenants into poverty and homelessness. Landlords do not have a legitimate need to impose these kinds of increases.  Many reasonable landlords would never think of imposing such massive increases.  Landlords who do impose such increases during a housing crisis, their rent gouging must be stopped.

Californians overwhelmingly support rent control.  The last referendum on rent control – Proposition 98 in 2008—was decided against landlords by a 22-point margin statewide.  Support continues to grow as people see landlords imposing massive rent increases during an affordable housing crisis.
Sacramento politicians are another matter.  The landlord lobby has invested millions into political candidates, making statewide change difficult.  Nonetheless, ask even the most reluctant politicians if they believe a landlord should be free to double their constituents’ rents, and they will usually respond in the negative.  In other words, they support rent control, they just won’t admit it.
Two things must happen to stop the current epidemic of rent gouging in California. Cities without rent control should adopt rent control laws. Equally important, the state Costa Hawkins law must be changed to allow cities to take action to protect all tenants without interference from Sacramento.  Landlords have had a 20-year period of windfall profits thanks to Costa Hawkins.  Tenants statewide must organize against this special interest law that is allowing rent gouging and abuse of tenants.

1 comment:

  1. What will it realistically take to change Costa Hawkins? It just seems so overwhelming!